Vol. 138, No. 14 — April 3, 2004

GOVERNMENT NOTICES

DEPARTMENT OF THE ENVIRONMENT

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Notice with respect to the Code of Practice for the Environmental Management of Road Salts

Whereas road salts are a substance on the Priority Substances List, a list compiled under the Canadian Environmental Protection Act, 1999;

Whereas the scientific assessment conducted on this substance has concluded that road salts that contain inorganic chloride salts with or without ferrocyanide salts enter the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological biodiversity or that constitute or may constitute a danger to the environment on which life depends;

Whereas on December 1, 2001, the Minister of the Environment and the Minister of Health published in the Canada Gazette, Part I, a statement under subsection 77(6) of that Act indicating their intention to recommend that road salts which contain inorganic chloride salts with or without ferrocyanide salts be added to Schedule 1 of that Act;

Whereas, pursuant to subsection 54(1) of that Act, the Minister of the Environment shall issue codes of practices respecting pollution prevention or specifying procedures, practices or release limits for environmental control relating to works, undertakings and activities during any phase of their development and operation;

Whereas, pursuant to subsection 91(1) of that Act, the Minister of the Environment published in the Canada Gazette, Part I, on September 20, 2003, a copy of the proposed Code of Practice for the Environmental Management of Road Salts, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Code of Practice or to file a notice of objections requesting that a board of review be established and stating the reasons for the objection;

Whereas the Code of Practice for the Environmental Management of Road Salts is intended to fulfill the requirement enacted in section 92 of that Act, to make an instrument respecting preventive or control actions within 18 months after the publication of the proposed instrument under subsection 91(1);

Therefore, the Minister of the Environment hereby issues, pursuant to subsection 54(1) of that Act, the Code of Practice for the Environmental Management of Road Salts, in accordance with the schedule hereto.

DAVID ANDERSON
Minister of the Environment

EXPLANATORY NOTE

(This note is not part of the notice.)

This Code of Practice was developed by Environment Canada through a multi-stakeholder consultation process for road salts that contain inorganic chloride salts with or without ferrocyanide salts.

CODE OF PRACTICE FOR THE
ENVIRONMENTAL MANAGEMENT
OF ROAD SALTS

INTERPRETATION

1. The following definitions apply in this Code:

"organization" means

(a) any public entity that uses or that is responsible for the use of road salts on public roads in Canada; or

(b) any company that holds a concession or lease to manage a public road, unless the public entity from which the company holds that concession or lease has developed a salt management plan that the company agrees to implement.

"road salts" mean road salts that contain inorganic chloride salts with or without ferrocyanide salts.

"TAC Syntheses of Best Practices" means the Syntheses of Best Practices — Road Salt Management appended to the Salt Management Guide published by the Transportation Association of Canada (TAC) in 1999, ISBN 1-55187-136-X, and updated in September 2003, as amended from time to time.

"vulnerable area" means an area particularly sensitive to road salts where additional salt management measures may be necessary to mitigate the environmental effects of road salts in that area; vulnerable areas should be identified as per the guidance provided in Annex B of the Code.

2. Recommendations in this Code propose preventive or control actions aimed at the environmental management of road salts to protect the Canadian environment.

3. This Code does not replace nor supersede any laws or regulations adopted by federal, provincial, territorial or municipal authorities in relation to, among other things, environmental protection, road safety or use of road salts.

4. This Code is not the sole guidance available to users of road salts in Canada, and is intended to be used in conjunction with the Salt Management Guide and Syntheses of Best Practices developed by the Transportation Association of Canada and any federal, provincial, territorial or municipal maintenance standards. Nothing in this Code should be construed as a recommendation to take action to the detriment of road safety.

APPLICATION

5. This Code applies to

(a) organizations that use more than 500 tonnes of road salts per year (five-year rolling average); and

(b) organizations that have vulnerable areas in their territory that could be potentially impacted by road salts.

6. This Code does not apply to road salts used for domestic purposes, or for private or institutional uses.

SALT MANAGEMENT PLAN

7. An organization that meets the criteria of section 5 should prepare and implement a salt management plan that contains best management practices to protect the environment from the negative impacts of road salts. The management plan should cover all activities which may result in the release of road salts to the environment, such as salt storage, application of salts on roads, and disposal of snow containing road salts.

8. An organization that does not meet the criteria of section 5 should consider implementing the best management practices that are relevant to its local conditions in order to protect the environment from the negative impacts of road salts.

9. The salt management plan should

(a) provide a statement recognizing the role of a salt management plan in achieving improved environmental protection without compromising road safety;

(b) provide a commitment or endorsement of the plan at the highest level in the organization;

(c) identify activities or operations through which road salts may be released to the environment and goals to achieve reduction of the negative environmental impacts of these releases;

(d) assess current practices against recommended best management practices, including those contained in the TAC Syntheses of Best Practices;

(e) contain documentation of all policies and procedures applicable to the salt management plan;

(f) include communication activities necessary to inform the organization and the public of the salt management plan and related policies and procedures;

(g) contain a training program for all personnel when managing or performing winter maintenance activities involving the use of road salts;

(h) provide response procedures to react to uncontrolled releases of road salts that could result in environmental impacts;

(i) ensure monitoring of actions to measure the plan's effectiveness;

(j) include record-keeping as described in section 15 of this Code;

(k) include a procedure for yearly review of the plan by the organization with continual improvement of salt management practices and the salt management plan as better management practices become known and progress is achieved; and

(l) establish and implement corrective actions to address deficiencies identified in the operations of the organization to which the plan applies.

10. The environmental impact indicators listed in Annex A, the guidance for identifying vulnerable areas provided in Annex B and the data gathering and reporting provisions in Annex C of this Code should be considered during the development and implementation of the salt management plan.

11. The content and level of detail of the salt management plan may vary according to the organization's size and capability.

BEST MANAGEMENT PRACTICES

12. It is recommended that best management practices referred to in sections 7 and 8 and found in the TAC Syntheses of Best Practices be selected according to the following objectives:

(a) Salt Storage: The objective is the prevention or control of releases from existing and new sites. In pursuing this objective, the following practices should be considered: coverage of salt piles and blended salt-sand piles, handling practices that avoid uncontrolled releases, drainage management, wash water collection and treatment, training of personnel, and monitoring of the effectiveness of the facility.

(b) Snow Disposal: The objective is the control of releases from existing and new sites. In pursuing this objective, the following practices should be considered: location and construction of the sites to take into account operational and environmental factors, drainage management, training of personnel and monitoring of the effectiveness of the facility.

(c) Salt Application: The objective is the reduction of the negative impacts of road salts by delivering the right amount of road salts in the right place at the right time. In pursuing this objective, consideration should be given to using the most recent advancements in the application of winter maintenance anti-icing and de-icing materials, winter maintenance equipment, and road weather information and other decision support systems. As well, the training of personnel and the monitoring of the effectiveness of road salt application techniques should be considered.

IMPLEMENTATION

13. An organization that meets the criteria of section 5 should prepare a salt management plan within one year after publication of this Code in the Canada Gazette. It is recommended that implementation of the plan begins in the financial period or fiscal year immediately following the preparation of the plan.

14. It is recommended that organizations hiring agents or contractors ensure that those agents or contractors comply with any measures in the salt management plan related to their work.

RECORD-KEEPING AND REPORTING

15. An organization that meets the criteria of section 5 should

(a) provide to the Minister of the Environment

(i) notification of intent to prepare a salt management plan within six months after publication of this Code in the Canada Gazette or within six months of becoming subject to this Code, whichever is later; and
(ii) information specified in Annex C of this Code, in the form provided by the Minister, by June 30 of the year following the year that the organization becomes subject to this Code and every year thereafter;

(b) keep records of all data reported, copies of the salt management plan, plan revisions, training records, and any yearly review reports, including those that contain corrective action;

(c) retain the information referred to in paragraph (b) for seven years; and

(d) make the information referred to in paragraph (b) available to the Minister of the Environment upon request.

REVIEW OF PROGRESS AND NEED
FOR FURTHER ACTION

16. In order to monitor the effectiveness of this Code, organizations will be invited to cooperate with the Minister of the Environment in the preparation of progress reports on the development and implementation of salt management plans.

17. (a) Five years after publication of this Code in the Canada Gazette, organizations will be invited to cooperate with the Minister of the Environment and to participate in an evaluation of progress achieved towards prevention and reduction of the negative impacts of road salts on the environment through the implementation of this Code.

(b) The review will consider the level of implementation of best management practices, such as those found in the TAC Syntheses of Best Practices, the progress accomplished towards preventing or reducing the negative impacts of road salts on the Canadian environment and road safety monitoring data.

(c) This review will help determine if other steps or programs are needed to further prevent or reduce negative impacts of road salts on the environment.

Annex A: Environmental Impact Indicators for Road Salts

Introduction

The purpose of Annex A is to provide guidance by identifying concentrations of chloride in the environment at which certain negative environmental impacts are likely to occur. A series of thresholds have been identified for different environmental compartments: surface water, groundwater and soil. Concentrations above these levels have the potential to result in negative impacts. In all cases, natural background concentrations should be considered in evaluating regional and local impacts. Data in this annex are based on findings presented in the Road Salts Priority Substances List Assessment Report.

Surface water

The following paragraphs present certain thresholds associated with concentrations of chloride in surface water.

Figure 1 presents background concentrations of chloride in Canadian surface waters and concentrations of chloride that cause adverse biological effects. The column on the left provides a range of average background concentrations for five regions in Canada. The variation in background concentrations of chloride is greatest in western Canada and markedly decreases moving eastward to the Great Lakes area and Atlantic Canada. The lowest variation in chloride concentration is reported on the Canadian Shield.

The right column of Figure 1 is useful for identifying the levels of chloride in surface waters above and below concentrations reported to cause certain negative impacts. Concentrations of chloride of approximately 140 mg/L should be protective of freshwater organisms for short-term exposure; concentrations less than 35 mg/L are likely protective during long-term exposures. Overall, approximately 5 percent of species are predicted to experience effects from chronic exposure to concentrations of chloride of about 210 mg/L, while 10 percent of species would be affected at concentrations of about 240 mg/L.

Other jurisdictions have derived guidelines for the exposure of aquatic organisms to chlorides (Fig. 1). The United States Environmental Protection Agency (EPA) developed a similar guideline. Overall, the EPA guideline indicates that biota, on average, should not be affected unacceptably if the four-day average concentration of chloride does not exceed 230 mg/L more than once every three years. Similarly, the biotic impacts would be minimal if the one-hour average chloride concentration does not exceed 860 mg/L more than once every three years.

Lakes located in Canada typically undergo vertical mixing every spring and fall as a result of a change in water temperature. Dissolved salts can hinder the vertical mixing of water bodies as dense, salt-laden water sinks to deeper layers (meromixis). The absence of vertical mixing can ultimately lead to a depletion of oxygen in the lower layers of lakes and a reduction in the cycling of nutrients. Meromictic conditions have developed in lakes with salt concentrations of approximately 60 mg Na/L and 105 mg Cl/L. Small, deep lakes are the most vulnerable, although concentrations associated with meromixis will vary greatly, depending on local conditions.

Groundwater

Chloride concentrations identified for freshwater biota will likely be protective of groundwater biota and groundwater that emerges into surface water.

A significant proportion of road salts may be contained within the groundwater system. The time taken to reach an equilibrium where salt inputs are balanced by salt outputs depends on local hydrogeological conditions and may take from a few years to hundreds of years.

Soils

Soil integrity, soil organisms and vegetation will generally be protected at concentrations of about 60 mg Na/L and 90 mg Cl/L. Damage to plants has also been observed at soil concentrations of 16 mg Na/kg and 30 mg Cl/kg (dry weight). Changes in natural plant communities have been recorded in areas affected by road salts runoff and liquid salt spray from moving vehicles.

Annex B: Guidance for Identifying Areas
That Are Vulnerable to Road Salts

Purpose

The purpose of Annex B is to provide guidance for organizations to consider when identifying areas of a receiving environment that may be particularly sensitive to road salts. Once a vulnerable area has been identified, organizations may then determine the level of vulnerability and the need to implement additional salt management measures.

Additional salt management measures in vulnerable areas may include

— using technologies that further optimize the use of road salts;

— using environmentally, technically and economically feasible alternatives to road salts;

— increasing monitoring and measuring of chlorides and/or their impacts;

— locating patrol yards and snow disposal sites outside of vulnerable areas; or

— considering location and protection of vulnerable areas in the design of new roads and/or upgrading of existing roads.

It is important to note, when identifying vulnerable areas, that an area may be vulnerable either to infrequent but heavy addition of road salts or to light but frequent addition of road salts.

Organizations may consider consulting with entities that conduct, under their programs, work that could be relevant to the identification of areas vulnerable to road salts. In addition, organizations may wish to exchange information with other organizations adjacent to or having common authority over these vulnerable areas and consult with their constituents.

Notes:

— Subsection 36(3) of the Fisheries Act prohibits the deposit of a deleterious substance into water frequented by fish. Nothing in this Annex should be interpreted as an authorization or recommendation to ignore this prohibition.

— The recommendations described above are intended to complement road salt management procedures already established in areas identified, designated or protected by a local, provincial, territorial, aboriginal, national or international system or body as ecologically significant or ecologically important.

Considerations

When identifying vulnerable areas, organizations should consider

1. areas draining into bodies of water, such as

(a) lakes and ponds with low-dilution and long residence times;

(b) watercourses that experience the cumulative effects of a dense network of highways; and

(c) provincially significant wetlands adjacent to roadways,

where the addition of road salts has the potential to significantly raise the chloride concentration of the water to the point where it could present a threat of serious or irreversible environmental damage;

2. areas draining into small, moderately deep lakes, where the addition of road salts has the potential to create layers of water of different salinity within the lake that prevent normal vertical mixing of the water (meromictic conditions);

3. areas where the addition of road salts has the potential to raise the chloride concentration, after mixing, to levels that could harm local fish or fish habitat;

4. areas adjacent to salt-sensitive native or agricultural vegetation, where the addition of road salts has the potential to cause severe reductions in flowering and fruiting, severe foliar, shoot and root injury, growth reductions, or reductions in germination and seedling establishment caused by elevated soil levels of sodium and chloride or aerial spray of sodium and chloride;

5. areas where the addition of road salts has the potential to harm the integrity of a life cycle (e.g. spawning grounds, nursery, rearing, food supply and migration areas for birds);

6. areas where the addition of road salts has the potential to harm a habitat necessary for the survival or recovery of a wildlife species listed on the List of Wildlife Species at Risk (Schedule 1 of the Species at Risk Act) where the area is identified as the species' critical habitat in the recovery strategy or in the action plan for the species established under that Act;

7. areas draining into sources of drinking water (surface water or groundwater, including wells), where the addition of road salts has the potential to raise the chloride concentration of the water to the point where it could not be used as a source of drinking water. Due regard should be given to background concentrations of chloride and other possible sources of chloride in making such a determination;

8. areas draining into groundwater recharge zones or that have an exposed or shallow water table, with medium to high permeability soils, such as medium to coarse sand and gravel, where the addition of road salts has the potential to significantly raise the chloride concentration of the groundwater to the point where it could present a threat of serious or irreversible environmental damage.

Annex C: Monitoring and Measuring Progress

The purpose of Annex C is to provide a common approach to monitoring and measuring progress in road salt use, the implementation of best management practices with respect to road salts, and the concentration of road salts in the environment. Information collected will be used in conjunction with additional winter severity weather data provided by the Meteorological Service of Canada, environmental monitoring data collected from case studies and water quality monitoring programs, and road safety data provided by Transport Canada to determine the extent and effectiveness of implementation of the Code of Practice.

Information to be provided to Environment Canada by organizations is described below.

1. Background Information

Organization

— Name and address;

— Technical contact, telephone and fax numbers, and electronic mail address;

— Population (municipalities only).

Salt management plan

— Existence of a salt management plan;

— Date of approval of the salt management plan;

— Date of latest revision of the salt management plan, where applicable.

Road length serviced

— Total length of road on which salt is applied in the organization's jurisdiction.

Winter severity

— Organization's rating of the severity of the winter;

— Municipal Organizations Only — Total number of events requiring salt application during the winter averaged over all districts within the organization's jurisdiction.

2. Materials Used

— Total quantity of road salts used for winter road maintenance;

— Description of non-chloride materials used for winter road maintenance.

3. Material Storage

— Organization's objectives for implementing best management practices related to material storage, as indicated in its salt management plan;

— State of implementation of each management practice.

4. Winter Road Maintenance Equipment and Road Salt Application Practices

— Organization's objectives for implementing best management practices related to road maintenance equipment and salt application practices, as indicated in its salt management plan;

— State of implementation of each management practice;

— State of calibration program for equipment.

5. Snow Disposal

— Organization's objectives for implementing best management practices related to snow disposal, as indicated in its salt management plan;

— State of implementation of each management practice.

6. Winter Road Maintenance Training

— Existence of a winter road maintenance training program related to the organization's salt management plan;

— Organization's objectives for training of personnel, as indicated in its salt management plan;

— State of training of personnel.

7. Areas Vulnerable to Road Salts

— Existence of areas vulnerable to road salts;

— Description of additional salt management practices undertaken by the organization in identified vulnerable areas, where applicable.

8. Environmental Monitoring

— Chloride concentration and frequency of sampling at each sampling location, if available.

[14-1-o]

DEPARTMENT OF THE ENVIRONMENT

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Notice with respect to the Guidelines for the Reduction of Ethylene Oxide Releases from Sterilization Applications

Whereas ethylene oxide is a substance on the Priority Substances List, a list compiled under the Canadian Environmental Protection Act, 1999;

Whereas the scientific assessment conducted on this substance has concluded that ethylene oxide enters the environment in a quantity or concentration or under conditions that constitute or may constitute a danger in Canada to human life or health;

Whereas on April 13, 2002, the Minister of the Environment and the Minister of Health published in the Canada Gazette, Part I, a statement under subsection 77(6) of that Act indicating their intention to recommend that ethylene oxide be added to Schedule 1 of that Act;

Whereas, pursuant to subsection 54(1) of that Act, the Minister of the Environment shall issue release guidelines recommending limits, including limits expressed as concentrations or quantities, for the release of substances into the environment from works, undertakings or activities;

Whereas the Guidelines for the Reduction of Ethylene Oxide Releases from Sterilization Applications are intended to fulfill the requirement enacted in section 91 of that Act, to propose preventive or control actions within two years after the Minister of the Environment and the Minister of Health have published a statement under subsection 77(6) in the Canada Gazette;

Therefore, the Minister of the Environment is hereby pleased to propose to issue, pursuant to subsection 54(1) of that Act, the Guidelines for the Reduction of Ethylene Oxide Releases from Sterilization Applications, in accordance with the schedule hereto.

Any person may, within 60 days after the publication of this notice, file with the Minister of the Environment comments with respect to the proposed Guidelines 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, Chemicals Control Branch, Environmental Protection Service, Department of the Environment, Ottawa, Ontario K1A 0H3.

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

DAVID EGAR
Director General
Pollution Prevention Directorate
On behalf of the Minister of the Environment

Guidelines for the Reduction of Ethylene Oxide Releases from Sterilization Applications

Interpretation

1. In these Guidelines,

"aeration" means the part of the sterilization process during which residual ethylene oxide or its reaction products dissipate until predetermined levels are reached, whether under forced air flow, natural or mechanically assisted convection, or other means, from previously sterilized materials after the sterilization cycle is complete;

"aerator" means any piece of equipment or space in which materials previously sterilized with ethylene oxide are placed or remain for the purpose of aeration;

"aerator exhaust stream" means all ethylene oxide-contaminated air which is released from an aerator during aeration;

"animal care facility" means any facility that provides veterinarian care, food, water, or shelter to an animal;

"back-draft valve exhaust stream" means the air stream that results from collection of ethylene oxide-contaminated air that may be released from a commercial sterilizer through a back-draft valve or rear chamber exhaust system during unloading of the sterilized materials;

"commercial sterilizer" means any sterilizer in a facility that

(a) sterilizes products or equipment manufactured elsewhere as its principal business;
(b) sterilizes products or equipment it manufactures; or
(c) sterilizes materials used in conducting its business, other than in a healthcare or animal care facility;

"control efficiency" means the efficiency of an emission control system in reducing the mass or concentration of ethylene oxide in an exhaust stream and expressed as a percentage calculated across the emission control system as follows:

where EO_in is the mass or concentration of ethylene oxide at the inlet

EO_out is the mass or concentration of ethylene oxide at the outlet

"emission control system" means an article, machine, piece of equipment, or contrivance which reduces the amount of ethylene oxide between the inlet and outlet of the system. It includes catalytic oxidation devices, thermal oxidation devices and acid-water scrubbers;

"facility" means all buildings, equipment, structures and stationary items that are located on a single site or on contiguous or adjacent sites and that are owned or operated by the same person and that function as a single integrated site;

"healthcare facility" means any facility that provides diagnostic services and general and specialized medical care to human beings. It includes acute care facilities, nursing homes, long term care facilities, community health centres, medical and dental offices, professional's private treatment facilities, and health units in industry;

"owner or operator" means any person who holds a right in, has possession, control or custody of, is responsible for the operation of, or has the power to dispose of a sterilizer or aerator;

"sterilization cycle" means the process which begins when ethylene oxide is introduced into the sterilizer, that includes the initial purge or evacuation after sterilization, and subsequent air, steam or other washes, and ends after evacuation of the final air wash;

"sterilizer" means any piece of equipment in which ethylene oxide is used as a biocide;

"sterilizer exhaust stream" means all ethylene oxide-contaminated air which is intentionally released from the sterilizer during the sterilization cycle; and

"year" means a consecutive 12-month period.

Application

2. Effective January 1, 2007, subject to section 3, these Guidelines apply with respect to facilities that purchase or use a total of 10 kg or more of ethylene oxide per year for sterilization purposes.

3. (1) Subject to subsection (2), these Guidelines do not apply with respect to sterilizers that use ethylene oxide exclusively as a control product as defined in the Pest Control Products Act.

(2) These Guidelines apply when ethylene oxide is used as a control product that is exempt from the Pest Control Products Act according to section 3 of the Pest Control Products Regulations.

(3) These Guidelines do not apply with respect to aerators that exclusively receive materials from a sterilizer referred to in subsection (1).

(4) These Guidelines do not apply with respect to emission control systems that exclusively receive exhaust streams from a sterilizer referred to in subsection (1).

Performance Criteria

4. An owner or operator should operate a sterilizer in accordance with the following:

(a) the sterilizer exhaust stream is ducted to an emission control system that has a control efficiency of at least 99 percent;

(b) in the case of a sterilizer in which the chamber or the supply piping is at or above atmospheric pressure, there is no liquid discharge during the sterilization cycle and during aeration;

(c) in the case of a commercial sterilizer that uses more than 2 tonnes of ethylene oxide per year and that has a gross chamber volume greater than 3 cubic metres, the concentration of ethylene oxide in the back-draft valve exhaust stream does not exceed 5 300 parts per million.

5. An owner or operator should operate an aerator in accordance with one of the following:

(a) the concentration of ethylene oxide released to the atmosphere from the aerator exhaust stream is below one part per million;

(b) the aerator exhaust stream is ducted to an emission control system that has a control efficiency of at least 99 percent.

6. The owner or operator of a sterilizer or aerator used in a healthcare facility should conform to the standard Installation, Ventilation, and Safe Use of Ethylene Oxide Sterilizers in Health Care Facilities, CAN/CSA-Z314.9, as amended from time to time, published in January 2001 by CSA International.

Compliance and Performance Provisions

7. Notwithstanding section 2, within six months after publication of these Guidelines in the Canada Gazette, an authorized senior administrator of a facility should indicate in writing to the Minister of the Environment his commitment to comply with these Guidelines and provide the information outlined in the Annex.

8. An owner or operator should ensure that an emission control system is installed, operated and maintained in accordance with the instructions of the manufacturer.

Monitoring Provisions

9. An owner or operator should test all emission control systems every year to determine their control efficiency.

10. An owner or operator should test the aerator exhaust stream of at least one aerator every year to determine the concentration of ethylene oxide released to the atmosphere.

11. All testing should be conducted under normal operating conditions and maximum ethylene oxide mass flow in the sterilizer or aerator exhaust stream, as the case may be.

Reporting Provisions

12. Unless an owner or operator is subject to the reporting requirements of the National Pollutant Release Inventory, the owner or operator should provide to the Minister of the Environment, with the form provided by the Minister, information specified in the Annex by June 30 of every year.

Annex

Information to Be Provided to Environment Canada

1. Facility name and address.

2. Technical contact, telephone and fax numbers, and electronic mail address.

3. Quantity of ethylene oxide purchased or used during the year.

4. Number of sterilizers subject to these Guidelines and volume of each sterilizer.

5. Number and type of emission control systems subject to these Guidelines.

6. Results of latest testing referred to in sections 9 and 10, and date of testing.

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DEPARTMENT OF THE ENVIRONMENT

DEPARTMENT OF HEALTH

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Publication of final results of investigations and recommendations for the substances 1,2-dichlorobenzene, 1,4-dichlorobenzene, trichlorobenzenes, tetrachlorobenzenes and pentachlorobenzene (paragraphs 68 (b) and (c) of the Canadian Environmental Protection Act, 1999)

Whereas a summary of a follow-up report to the assessment of 1,2-dichlorobenzene, 1,4-dichlorobenzene, trichlorobenzenes, tetrachlorobenzenes, and pentachlorobenzene, substances originally specified on the first Priority Substances List, is annexed hereby,

Notice therefore is hereby given that the Ministers of the Environment and of Health propose to take no further action in respect of 1,2-dichlorobenzene, 1,4-dichlorobenzene, and trichlorobenzenes.

Notice is further given that the Ministers of the Environment and of Health intend to recommend to Her Excellency the Governor in Council that tetrachlorobenzenes and pentachlorobenzene be added to the List of Toxic Substances in Schedule 1 to the Canadian Environmental Protection Act, 1999.

Notice furthermore is given that the Ministers of the Environment and of Health propose to consider tetrachlorobenzenes and pentachlorobenzene candidates for virtual elimination, and that consultations will be held on the development of a regulation or instrument respecting preventive or control action in relation to tetrachlorobenzenes and pentachlorobenzene.

DAVID ANDERSON
Minister of the Environment

PIERRE S. PETTIGREW
Minister of Health

Annex

Summary of the Follow-up Report to the Assessment of the
Substances 1,2-Dichlorobenzene, 1,4-Dichlorobenzene,
Trichlorobenzenes, Tetrachlorobenzenes, and
Pentachlorobenzene

1,2-Dichlorobenzene (1,2-DCB), 1,4-dichlorobenzene (1,4-DCB), trichlorobenzenes (TCBs), tetrachlorobenzenes (TeCBs) and pentachlorobenzene (QCB), which appeared on the first Priority Substances List (PSL1), were assessed to determine whether these substances should be considered "toxic" as defined under the Canadian Environmental Protection Act (CEPA). It was concluded in the PSL1 assessment that these compounds were not "toxic" under paragraphs 11(b) or 11(c) of CEPA. However, there was insufficient information to conclude whether they could have immediate or long-term harmful effects on the environment, under paragraph 11(a) of the Act. Concentration data for these chlorobenzenes (CBzs) in freshwater and marine sediments and soil environments were lacking. Corresponding data reporting effects on benthic and soil-dwelling organisms were also needed to complete this assessment.

Subsequent to the completion of the PSL1 follow-up reports, the Canadian Environmental Protection Act, 1999 (CEPA 1999) came into effect. Paragraph 64(a) of CEPA 1999 has a definition of "toxic" that is similar to that in paragraph 11(a) under the original CEPA and addresses whether a substance has or may have an immediate or long-term harmful effect on the environment. However, in CEPA 1999, paragraph 64(a) has been expanded to include effects on biodiversity. Research studies to address data gaps for the CBzs of interest were funded, and emphasis was placed on studies that examined effects on benthic organisms exposed to the CBzs of interest. Additionally, recent literature was reviewed for new data on concentrations in sediment and soil for each of the CBzs under consideration and for information on the effects on organisms resulting from exposure to these compounds.

Both 1,2-DCB and 1,4-DCB are produced in Canada, based on reports from the early 1990s. 1,4-DCB is used more extensively than 1,2-DCB, primarily as an air freshener/deodorizer. During the mid-1990s, 40 to 45 tonnes of TCBs were expected to be imported into Canada, and imports of TeCBs and QCB were not anticipated.

The primary route of entry for CBzs into Canadian surface waters and associated sediments is via effluents from industrial and sewage treatment plants. 1,2-DCB, 1,4 DCB, TCBs, TeCBs and QCB have been identified in pulp and paper mill effluents. Effluents from iron and steel manufacturing contribute to loadings of TCBs, TeCBs and QCB, while petroleum refinery effluents have been reported to contain TeCBs and QCB. The more highly chlorinated benzenes, particularly hexachlorobenzene, are subject to reductive dechlorination, which may contribute to accumulation of the lower chlorinated homologues (e.g. structurally similar DCBs and TCBs) in buried sediments. The main source of CBzs to Canadian soils is accidental spillage of industrial chemicals, although CBzs may be added to agricultural soils during amendment with sewage sludge. Industrial emissions to the atmosphere represent another route of entry into the Canadian environment.

Maximum Canadian concentrations of each of the CBzs under consideration in this report were observed in sediment samples collected from the St. Clair River in Ontario. 1,4-DCB was the only CBz detected in Canadian soil samples. The CBzs of interest in this report are known to cause both chronic and acute effects in controlled tests on benthic and soil-dwelling organisms. In general, benthic organisms are more sensitive to the CBzs than soil-dwelling species, based on toxicity studies to date.

Concentrations of the CBzs of interest in the highly contaminated sediments of the St. Clair River are elevated enough that sensitive benthic organisms could experience adverse effects.

Each of the CBzs under investigation in this report has been estimated to persist in sediment for longer than two years. The half-lives of 1,2-DCB, 1,4-DCB, TCBs and TeCBs in soil have been estimated to be approximately eight months, while QCB's half-life in soil has been estimated to be two years. Additionally, TeCBs and QCB are subject to atmospheric transport from its source to remote areas and, therefore, are considered persistent in air. All of the CBzs of interest in this report therefore meet the criteria for persistence as defined in the Persistence and Bioaccumulation Regulations of CEPA 1999 due to the persistence of these compounds in sediment and soil. The higher chlorinated products, TeCBs and QCB, also are persistent in air. The lower chlorinated benzenes (1,2-DCB, 1,4-DCB and TCBs) are not expected to be highly bioaccumulative. However, the TeCBs and QCB do have a high potential to bioaccumulate and meet the bioaccumulation criteria defined in the Persistence and Bioaccumulation Regulations of CEPA 1999.

There are special concerns about persistent and bioaccumulative substances. Persistent substances can remain in the environment for long periods of time, increasing the probability and the duration of exposure. In addition, persistent substances are subject to long-range transport, which results in low-level, widespread contamination. Bioaccumulative substances have the potential to biomagnify, and consequently releases of extremely low concentrations of persistent and bioaccumulative substances may—either alone or in combination with other similar substances—cause severe adverse effects.

Based on the information available, it is concluded that 1,2-DCB, 1,4-DCB and TCBs are not entering the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity, but TeCBs and QCB are entering the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity. Therefore, 1,2-DCB, 1,4-DCB and TCBs are not considered "toxic" as defined in paragraph 64(a) of CEPA 1999. It is, however, concluded that TeCBs and QCB be considered "toxic" as defined in paragraph 64(a) of CEPA 1999.

QCB and TeCBs are persistent, bioaccumulative, predominantly anthropogenic and are considered "toxic" under paragraph 64(a) of CEPA 1999, and as such, meet the criteria for Track 1 substances under the Toxic Substances Management Policy. Since there is currently no commercial demand for QCB and TeCBs in Canada, options to prevent their reintroduction into the Canadian market should be explored.

The Follow-up Report may be obtained from Environment Canada's Web site (http://www.ec.gc.ca/substances/ese/eng/ PSAP/PSL1_IIC.cfm) or from the Inquiry Centre, Environment Canada, 351 Saint-Joseph Boulevard, Gatineau, Quebec K1A 0H3 (1-800-668-6767).

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BANK OF CANADA

FINANCIAL STATEMENTS
(YEAR ENDED DECEMBER 31, 2003)

FINANCIAL REPORTING RESPONSIBILITY

The accompanying financial statements of the Bank of Canada have been prepared by management in accordance with Canadian generally accepted accounting principles and contain certain items that reflect best estimates and judgment of management. The integrity and reliability of the data in these financial statements is management's responsibility. Management is responsible for ensuring that all information in the Annual Report is consistent with the financial statements.

In support of its responsibility, management has developed and maintains financial and management control systems and practices to provide reasonable assurance that transactions are properly authorized and recorded, that financial information is reliable, that the assets are safeguarded and liabilities recognized, and that the operations are carried out effectively. The Bank has an internal Audit Department, whose functions include reviewing internal controls, including accounting and financial controls and their application on an ongoing basis.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control and exercises this responsibility through the Audit Committee of the Board. The Audit Committee is composed of members who are neither officers nor employees of the Bank and who are financially literate, with at least one member who is a financial expert. The Audit Committee is therefore qualified to review the Bank's annual financial statements and to recommend their approval by the Board of Directors. The Audit Committee meets with management, the Internal Auditor, and the Bank's external auditors who are appointed by Order-in-Council. The Audit Committee has established processes to evaluate the independence of the Bank's external auditors and reviews all services provided by them. The Audit Committee has a duty to review the adoption of, and changes in, accounting principles and procedures that have material effect on the financial statements, and to review and assess key management judgment and estimates material to the reported financial information.

These financial statements have been audited by the Bank's external auditors, Deloitte & Touche LLP and Raymond Chabot Grant Thornton, General Partnership and their report is presented herein. They obtain an understanding of the Bank's internal controls and procedures for financial reporting to plan and conduct such tests and other audit procedures as they consider necessary in the circumstances to express an opinion in their report presented herein. The external auditors have full and unrestricted access to the Audit Committee to discuss their audit and related findings.

Ottawa, Canada

D. A. DODGE
Governor

S. VOKEY, CA
Chief Accountant

AUDITORS' REPORT

To the Minister of Finance, registered shareholder of the Bank of Canada

We have audited the balance sheet of the Bank of Canada as at December 31, 2003, and the statement of revenue and expense for the year then ended. These financial statements are the responsibility of the Bank's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Bank as at December 31, 2003, and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.

Ottawa, Canada, January 20, 2004

DELOITTE & TOUCHE LLP
Chartered Accountants

RAYMOND CHABOT GRANT THORNTON
General Partnership
Chartered Accountants

BANK OF CANADA

Statement of revenue and expense

Year ended December 31, 2003

BANK OF CANADA

Balance sheet

As at December 31, 2003

BANK OF CANADA

BANK OF CANADA

Notes to the financial statements

Year ended December 31, 2003

1. The business of the Bank

The Bank of Canada's responsibilities focus on the goals of low and stable inflation, a safe and secure currency, financial stability, and the efficient management of government funds and public debt. These responsibilities are carried out as part of the broad functions described below. Expenses in the Statement of revenue and expense are reported on the basis of these five corporate functions as derived through the Bank's activity based costing allocation model.

Monetary policy

Contributes to solid economic performance and rising living standards for Canadians by keeping inflation low, stable, and predictable.

Currency

Designs, produces, and distributes Canada's bank notes, focusing on counterfeit deterrence through research on security features, public education, and partnership with law enforcement; replaces and destroys worn notes.

Financial system

Promotes safe, sound, and efficient financial systems, both within Canada and internationally.

Funds management

Provides high-quality, effective, and efficient funds-management services for the government, as its fiscal agent; for the Bank; and for other clients.

Retail debt services

Ensures that all holders of Canada Savings Bonds, Canada Premium Bonds, and Canada Investment Bonds have their information registered and their accounts serviced through efficient operations and systems support. The Bank recovers the cost of retail debt operations.

2. Significant accounting policies

The financial statements of the Bank are in accordance with Canadian generally accepted accounting principles and conform to the disclosure and accounting requirements of the Bank of Canada Act and the Bank's by-laws. A Statement of cash flows has not been prepared as the liquidity and cash position of the Bank are not of primary concern to users of these financial statements. Other information regarding the Bank's activities may be derived from the Statement of revenue and expense and the Balance sheet.

The significant accounting policies of the Bank are

(a) Accounting estimates

The preparation of financial statements in accordance with Canadian generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the amounts recorded in the financial statements and notes to financial statements. These estimates are based on management's best knowledge of current events and actions that the Bank may undertake in the future. Actual results may differ from those estimates.

(b) Revenues and expenses

Revenues and expenses are accounted for on an accrual basis.

(c) Employee benefit plans

The Bank sponsors a number of defined-benefit plans that provide pension and other post-retirement and post-employment benefits to most of its employees. The Bank accrues its obligations under these benefit plans and the related costs, net of plan assets. The costs and the obligations of the plans are actuarially determined using the projected benefit method and using management's best estimate of expected plan investment performance, salary escalation, retirement ages of employees and expected health care costs. Management considers that the assumptions used to determine the accrued benefit obligation and the net benefit cost of pension and other retirement benefits are of a long-term nature, which is consistent with the long-term nature of employee future benefits.

The benefit expense (income) recognized in the period consists of the current service cost, plus interest on the obligation, less expected return on assets, plus amortization of past incurred costs and actuarial gains and losses. For this purpose, the current service cost of employee benefits and the interest cost on the liability are reported as incurred. The expected return on assets for the year is based on a target rate of return per annum applied to the market-related value of plan assets, which is based on the market value of assets adjusted to amortize over five years the annual excess (shortfall) of investment returns in relation to target returns. Amortization of past incurred costs such as the initial transitional obligation and the cost of plan amendments is carried out over the expected average remaining service lifetime (EARSL) of plan members, which has been determined to be 12 years for the pension plans and for the severance pay and retiring allowance program, 14 years for the post-retirement health care plan, and 7 years for post-employment benefits plans. Cumulative actuarial gains (losses) are amortized over EARSL to the extent they exceed 10% of the greater of the benefit obligation and the market-related value of plan assets.

During 2003, the Bank adopted the proposed accounting recommendations of the Accounting Standards Board, "Employee Future Benefits — Additional Disclosures" (see note 10).

(d) Translation of foreign currencies

Assets and liabilities in foreign currencies are translated to Canadian dollars at the rates of exchange prevailing at year-end. Investment income is translated at the rate in effect at the date of the transaction. The resulting gains and losses are included in the Statement of revenue and expense.

(e) Advances

Advances to members of the Canadian Payments Association are liquidity loans that are fully collateralized and generally overnight in duration. The Bank charges interest on advances under the Large Value Transfer System (LVTS) at the Bank Rate.

(f) Investments

Investments, consisting mainly of Government of Canada treasury bills and bonds, are recorded at cost and are adjusted for amortization of purchase discounts and premiums using the constant-yield method for treasury bills and bankers' acceptances and the straight-line method for bonds. The amortization, as well as gains and losses on disposition, are included in the Statement of revenue and expense.

(g) Securities Lending Program

The Bank operates a Securities Lending Program to support the liquidity of Government of Canada securities by providing a secondary and temporary source of these securities to the market. These securities-lending transactions are fully collateralized and are generally overnight in duration. The securities loaned continue to be accounted for as investment assets. Lending fees charged by the Bank on these transactions are included in revenue at the date of the transaction.

(h) Bank premises

Bank premises, consisting of land, buildings, computer hardware/software and other equipment, are recorded at cost less accumulated depreciation. Computer software is capitalized only when its cost exceeds $2 million. Depreciation is calculated using the straight-line method and is applied over the estimated useful lives of the assets, as shown below.

(i) Securities purchased under resale agreements

Special purchase and resale agreements (SPRAs) are repo-type transactions in which the Bank offers to purchase Government of Canada securities from designated counterparties with an agreement to sell them back at a predetermined price on the agreed resale date, generally the next business day. The Bank is prepared to enter into SPRAs at the policy target rate, defined as the midpoint of the operating band for the overnight interest rate (i.e. 25 basis points below the Bank Rate), if overnight funds are generally trading above the indicated target level. SPRAs are transacted with primary dealers, a subgroup of government securities distributors that have reached a threshold level of activity in the Government of Canada debt markets.

Term repurchase agreements are also repo-type transactions in which the Bank acquires Government of Canada securities from designated counterparties with an agreement to sell them back at a predetermined price on an agreed resale date, generally over more than one business day. The transactions are carried out at market determined rates of interest, and as with SPRAs, term repurchase agreements are transacted with primary dealers.

The balance sheet category Securities purchased under resale agreements represents collateralized lending transactions. As such, this includes amounts at which the securities were originally acquired.

(j) Deposits

The liabilities within this category are Canadian-dollar demand deposits.

The Bank pays daily interest on Government of Canada deposits at a market determined rate, specifically, at the weighted average yield on the shortest maturity (typically one business day) of Government of Canada term deposits that are auctioned each morning to a group of eligible financial market participants.

For banks and other members of the Canadian Payments Association, the Bank pays interest on positive balances associated with the LVTS at the lower end of the operating band for the overnight interest rate (50 basis points below the Bank Rate). On special Deposit Accounts, which serve as collateral for LVTS participants, the Bank pays interest at the published overnight rate less a margin, which was 6.25 basis points at December 31, 2003 (6.25 basis points in 2002).

For other financial institution deposits, the Bank pays interest at a rate varying from 0% for non-interest-bearing accounts to a daily rate calculated on the average three month treasury bill less 0.20 %.

(k) Securities sold under repurchasing agreements

Sale and repurchase agreements (SRAs) are reverse repo-type transactions in which the Bank offers to sell Government of Canada securities to designated counterparties with an agreement to buy them back at a predetermined price the next business day. The Bank is prepared to enter into SRAs at the policy target rate, defined as the midpoint of the operating band for the overnight interest rate (i.e. 25 basis points below the Bank Rate), if overnight funds are generally trading below the indicated target level. SRAs are transacted with primary dealers, a subgroup of government securities distributors that have reached a threshold level of activity in the Government of Canada debt markets. SRAs are treated as collateralized borrowing transactions and recorded at the amounts at which the securities were originally sold plus accrued interest.

(l) Insurance

The Bank does not insure against direct risks of loss to the Bank, except for potential liabilities to third parties and where there are legal or contractual obligations to carry insurance. Any costs arising from these risks are recorded in the accounts at the time they can be reasonably estimated.

3. Expense by classes of expenditure

Recoveries represent the fees charged by the Bank for a variety of services.

4. Advances to members of the Canadian Payments Association

In November 2003, the Canadian Payments Association and the Bank of Canada moved from same-day settlement to next-day settlement environment for payment items cleared through the Automated Clearing Settlement System (ACSS). This eliminated the need to backdate the results of payments settling through the ACSS.

The elimination of retroactive settlement means that the results are recognized on the Bank's books the day the items actually settle in the ACSS. In addition, the operation of the ACSS no longer requires advances to (or deposits from) members of the Canadian Payments Association, which are reflected in the Bank's balance sheet (advances in 2002 were $534.9 million).

5. Investments

The Bank typically holds its investments in treasury bills and bonds until maturity. The amortized book values of these investments approximate their par values. There were no securities loaned under the Securities Lending Program at December 31, 2003.

6. Bank premises

The project in progress consists of the replacement of the HR service delivery system. Depreciation, on a straight-line basis over 5 years, will commence in 2004 upon completion of the project.

The Bank's new automated system that forms the core of foreign reserves management was placed into production in the current year and is included in the category Computer hardware/ software.

7. All other assets

This category includes accrued interest on Canadian investments of $257.9 million ($267.9 million in 2002). It also includes the pension accrued benefit asset of $78.6 million ($70.7 million in 2002).

8. Share capital

The authorized capital of the Bank is $5.0 million divided into 100,000 shares with a par value of $50 each. The shares are fully paid and, in accordance with the Bank of Canada Act, have been issued to the Minister of Finance, who is holding them on behalf of the Government of Canada.

9. Statutory reserve

The rest fund was established in accordance with the Bank of Canada Act and represents the statutory reserve of the Bank. The statutory reserve was accumulated out of net revenue until it reached the stipulated maximum amount of $25.0 million in 1955.

10. Employee benefit plans

The Bank sponsors a number of defined-benefit plans that provide pension and other post-retirement and post-employment benefits to most of its employees. The pension plans provide benefits under a Registered Pension Plan and a Supplementary Pension Arrangement.

Description of plans

(a) Pension benefit plans

The Bank of Canada Pension Plan was established in accordance with the provisions of the Bank of Canada Act. The Plan is a contributory defined-benefit plan that covers the majority of the Bank's employees. The Plan provides for retirement pension, survivors' pensions and refunds occasioned by termination of employment or death. Pension calculation is based mainly on years of service and average pensionable income and is generally applicable from the first day of employment. In 1992, a Retirement Compensation Arrangement was introduced to supplement the pensions of those employees who contribute above the maximum for the registered pension plans prescribed by Canada Customs and Revenue Agency. The Pension is indexed to reflect changes in the Consumer Price Index on the date payments begin and each January 1st thereafter. On December 1, 2003, as a result of the Bank's new pension governance structure, the Bank appointed an independent trust company (CIBC Mellon Trust Company) as Trustee of the Bank's Pension Trust Fund. Prior to December 2003, the trustees were appointed individually by the Bank's Board of Directors.

(b) Other benefit plans

The Bank sponsors post-retirement health, dental, and life insurance benefits, as well as post-employment self-insured Long-Term Disability (LTD) and continuation of benefits to disabled employees. The Bank also sponsors a severance pay and retiring allowance program for the majority of its employees. There are no requirements regarding the funding of those programs.

Funding policy

Contributions to the Pension Plan are determined by actuarial valuations which are made at least on a triennial basis. The most recent actuarial valuation for funding purposes of the Plan was done as of January 1, 2002. These valuations are done in accordance with legislative requirements and with the recommendations of the Canadian Institute of Actuaries for the valuation of pension plans. Employees are required to contribute to the Plan a percentage of their pensionable salary, which is 5.7% up to the Year's Maximum Pensionable Earnings (YMPE) and 7.5% of salary in excess of the YMPE until a maximum of 35 years of credited service. As a result of the current excess funded status of the Pension Trust Fund, the Bank has been required to take a legally mandated contribution holiday as of January 1, 2000. The next actuarial valuation for funding purposes will be done as of January 1, 2005. For the Supplementary Trust Fund, the Bank, as a plan sponsor, is responsible for any funding requirements.

Plan assets, benefit obligation, and plan status

1. Plan assets are held in the Bank of Canada Pension Trust Fund and the Supplementary Trust Fund. Based on the fair value of the plan assets held at December 31, 2003, the Pension Trust Fund's assets were comprised of 59.6% in equities, 27% in bonds, 10% in real return assets, 2% in real estate assets, and 1.4% in short-term securities and cash. The Supplementary Trust Fund's assets were comprised of 53% in equities and 47% short-term securities.

1. Annual rate of increase assumptions in the per capita cost of health care benefits used in performing the actuarial valuation of employee future benefits, were 10% for drugs and 9% for hospital costs grading down to 4.5% over 10 years and level thereafter (9% in 2002 grading down to 4.5% over 10 years), and 4% for dental (3% in 2002). The assumed health care cost trend rate for next year is 9.63% grading down to 4.5% by 2013 (9% in 2002 grading down to 4.5% by 2012). A one percentage point increase in assumed health care cost trend rates would have increased the service and interest costs and obligation by $1.0 million and $13.4 million respectively for post-retirement benefits and $0.03 million and $0.18 million respectively for post-employment benefits. A one percentage point decrease in assumed health care cost trends would have lowered the service and interest costs and the obligation by $0.77 million and $10.4 million, respectively for post-retirement benefits and $0.02 million and $0.15 million respectively for post-employment benefits.

The accrued benefit asset for the defined-benefit pension plans is included in the balance sheet category All other assets. The total accrued benefit liability for the other benefit plans is included in the balance sheet category All other liabilities.

Weighted-average assumptions used to determine benefit obligation

Net benefit expense (income) incurred in the period

Net benefit expense (income) recognized in the period¹

1. A discount rate assumption of 5.50% (5.75% in 2002) and an expected rate of return on plan assets assumption of 6% (5.70% in 2002) were used to determine the benefit expense of the pension plans. A discount rate of 5.30 % (5.99% in 2002) was used to determine the benefit expense of the other benefit plans. A compensation increase assumption of 4% (3% in 2002) was used for all plans to determine the pension benefit expense.

2003 sensitivity of key assumptions - Impact of .25% increase/decrease in assumptions

11. Commitments, contingencies, and guarantees

(a) Operations

The Bank has a long-term contract with an outsourced service provider for retail debt services, expiring in 2011. As at December 31, 2003, fixed payments totalling $110.6 million remained, plus a variable component based on the volume of transactions. The Bank recovers the cost of retail debt services from the Canada Investment and Savings Agency.

Commitments related to other support services are $1.8 million over the next year. The current contract is renewable in June 2004 for two 1-year extensions.

(b) Foreign currency contracts

The Bank is a participant in foreign currency swap facilities with the U.S. Federal Reserve for US$2 billion, the Banco de México for Can$1 billion and with the Exchange Fund Account of the Government of Canada. There were no drawings under any of those facilities in 2003 or 2002 and, therefore, there were no commitments outstanding at December 31, 2003.

(c) Investment contracts

Outstanding sale investment contracts of $1,899.7 million, at an interest rate of 2.75% per cent under special purchase and resale agreements, were settled by January 9, 2004 ($1,906.1 at the end of 2002 at an interest rate of 2.74%).

(d) Contingency

The Bank holds 8 000 shares in the Bank for International Settlements (BIS). The nominal value of each BIS share is 5 000 special drawing rights (SDR) of which 25%, i.e. SDR 1 250, is paid up. The balance of SDR 3 750 is callable at three months' notice by decision of the BIS Board.

(e) Guarantees

In 2003, the Bank adopted the requirements of the CICA Accounting Guideline (AcG 14) "Disclosure of Guarantees" which requires additional disclosure about a guarantor's obligation under certain guarantees. A guarantee is defined in AcG 14 as including (i) a contract that contingently requires the guarantor to make payments to the guaranteed party based on another entity's failure to perform under an obligating agreement (a performance guarantee) and (ii) an indemnification agreement.

Large Value Transfer System (LVTS) Guarantee

The Bank provides a variety of settlement services to the LVTS, which is owned and operated by the Canadian Payments Association. The LVTS is a well risk-proofed large-value payment system. The risk controls in this system include caps on net debit positions and collateral to secure the use of overdraft credit, both intraday and overnight. These risk control arrangements are sufficient to protect the system from the effects of the failure of a single participant and to allow the system to settle without any unwinding of payments. The Bank has agreed to guarantee the settlement of this system in the extremely remote event that more than one participant were to fail on the same day during LVTS operating hours. The amount at risk under this guarantee is not determinable since the guarantee would only be called upon if a series of extremely low probability events were to occur. No amount has been provided for in the liabilities of the Bank and no amount has ever been paid under this guarantee.

Other Indemnification Agreements

In the normal course of operations, the Bank provides indemnification agreements with various counterparties in transactions such as service agreements, software licenses, leases, and purchases of goods. Under these agreements, the Bank agrees to indemnify the counterparty against loss or liability arising from the acts or omissions of the Bank in relation to the agreement. The nature of the indemnification agreements prevents the Bank from making a reasonable estimate of the maximum potential amount that the Bank would be required to pay such counterparties.

12. Restructuring costs

As at 31 December 2003, a liability of $3.2 million remained to meet future obligations related to staff redundancies. The total unutilized balance of restructuring costs shown below is included in All Other Liabilities.

Costs of $5.2 million were incurred during 2003. Of this amount, $1.2 million related to severance which was recorded as a reduction in the restructuring provision and the remaining $4.0 million was recorded in the expenses by function component of the Statement of revenue and expense.

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DEPARTMENT OF INDUSTRY

OFFICE OF THE REGISTRAR GENERAL

Appointments

March 25, 2004

JACQUELINE GRAVELLE
Manager

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DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

Application for surrender of charter

Notice is hereby given that, pursuant to the provisions of the Canada Corporations Act, an application for surrender of charter was received from

March 24, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

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DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

Letters patent

Notice is hereby given that, pursuant to the provisions of the Canada Corporations Act, letters patent have been issued to

March 24, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

[14-1-o]

DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

MOTOR CARRIER PASSENGER COUNCIL OF CANADA/CONSEIL CANADIEN DU TRANSPORT DE PASSAGERS — Correction of corporate number

Notice is hereby given that letters patent dated June 17, 1999, were issued under Part II of the Canada Corporations Act to MOTOR CARRIER PASSENGER COUNCIL OF CANADA/ CONSEIL CANADIEN DU TRANSPORT DE PASSAGERS with the corporate number 362721-8.

As a result of a clerical error, the letters patent were issued containing an error in respect of the corporation's corporate number. In order to avoid undue hardship to the corporation, the Minister has now corrected the corporate number to 362712-8.

March 8, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

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DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

SHAHIR CORPORATION — Correction of name

Notice is hereby given that letters patent dated January 26, 2004, were issued under Part II of the Canada Corporations Act to SHAHIR CORPORATION, corporate number 421911-2.

As a result of a clerical error, the letters patent were issued containing an error in respect of the corporation's name. In order to avoid undue hardship to the corporation, the Minister has now corrected the name of the corporation to SHAHIR FOUNDATION.

March 17, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

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DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

Supplementary letters patent

Notice is hereby given that, pursuant to the provisions of the Canada Corporations Act, supplementary letters patent have been issued to

March 24, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

[14-1-o]

DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

Supplementary letters patent — Name change

Notice is hereby given that, pursuant to the provisions of the Canada Corporations Act, supplementary letters patent have been issued to

March 24, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

[14-1-o]

DEPARTMENT OF INDUSTRY

CANADA CORPORATIONS ACT

THE TORONTO DOMINION BANK — Correction of name

Notice is hereby given that a list of possible dissolutions, pursuant to the provisions of subsection 133(1) of the Canada Corporations Act, was published on March 6, 2004, listing the corporation "THE TORONTO DOMINION BANK," with the corporate number 095135-8, as having failed to file with the Department the summaries required to be filed pursuant to the provisions of subsection 133(1) of the said Act.

As a result of a clerical error, the corporation name should have read "THE PENSION FUND SOCIETY OF THE TORONTO-DOMINION BANK" with the same corporate number.

March 9, 2004

ROBERT WEIST
Director
Incorporation and Disclosure
Services Branch
For the Minister of Industry

[14-1-o]

NOTICE OF VACANCY

NATIONAL RESEARCH COUNCIL OF CANADA

President (full-time position)

Recognized globally, the National Research Council (NRC) is the Government of Canada's largest R&D; organization and a leader in the development of a progressive, knowledge-based economy for Canada. Through research, knowledge and innovation, NRC and its many partners contribute to leading edge discoveries, technology breakthroughs, the dissemination of scientific information, the building of community-based technology clusters, the creation of new business enterprises, industrial innovation and global competitiveness of Canadian companies.

The National Research Council has a portfolio of 20 research institutes and five technology centres involved in leading edge research, technology development, technology transfer, commercialization and innovation across a broad spectrum of science and engineering. NRC is also responsible for The Industrial Research Assistance Program (IRAP), which provides technology advice, R&D; funding and commercialization assistance to Canada's small- and medium-sized enterprises (SMEs) to enable them to succeed in the global marketplace of the 21st century; the Canadian Institute for Scientific and Technology Information (CISTI), a large science, technology and medical library, and the Canadian Technology Network (CTN) which provides business assistance to SMEs through a cross-country network of advisors. NRC also supports and manages national facilities as part of the S&T; infrastructure.

Location: National Capital Region

The successful candidate will have a Doctoral degree in science or engineering from a recognized university. The preferred candidate will have an extensive experience in research and development in academia, government or industry with a strong record of scholarly achievements; stature and credibility in the science and technology community; and extensive senior level experience in directing and managing R&D.; The selected candidate will also have experience with the process of transferring knowledge and technology into commercially or socially valuable products or services, experience in strategic management, organizational change and management techniques which promote and improve organizational performance and corporate governance, and have demonstrated effectiveness in developing and maintaining successful relationships and partnerships.

The National Research Council of Canada is looking for a candidate who has an excellent understanding of Canada's economic and social fabric, the role of its science and technology infrastructure, and the research and development challenges facing the nation. The candidate should know and understand the mandate, objectives and missions of the NRC, and have a good comprehension of the machinery of government, especially as it relates to the development of government science and technology policies and objectives and a good understanding of the Canadian Innovation System and the various roles played by industry, universities and government research organizations. The candidate should also have a strong appreciation of the role of international S&T; linkages and collaborations in enhancing Canada's place in the world. The candidate will have a good knowledge of the key public and private sectors, the nature of their technological requirements and the important organizations within these industrial sectors to provide direction on the NRC's strategic alliances and partnerships.

The ideal candidate will provide the corporate vision and leadership needed to attain NRC's mandate, realize its strategic direction and identify, analyze, and define long-range priorities and strategies. The candidate will integrate varied and complex requirements and expectations which originate from the private sector and government, NRC partners and clients and scientific communities and the candidate will mobilize the energies and talents of NRC staff, partners and clients towards shared goals. The candidate will have the capacity to develop and build alliances with government and private sector players and establish effective networks. The candidate should be able to influence senior industrial, government and academic representatives to advance the goals of the NRC, federal government science and technology initiatives, and the NRC's partners and clients. The candidate must ensure that the organization is positioned to meet the evolving science and technological priorities of Canada and have the ability to communicate effectively with stakeholders, including ministers, Parliamentary committees, the media and the public, in writing and orally (with the requisite self-confidence and presence of mind).

The selected candidate will have strong visionary, strategic leadership skills coupled with sound judgement to inspire others. Superior communication and interpersonal skills are required as well as discretion, flexibility, and objectivity.

The chosen candidate must be prepared to relocate to the National Capital Region or to a location within commuting distance.

Proficiency in both official languages is essential.

The selected candidate will also be subject to the Conflict of Interest and Post-Employment Code for Public Office Holders. Before or upon assuming their official duties and responsibilities, public office holders appointed on a full-time basis must sign a document certifying that, as a condition of holding office, they will observe the Code. They must also submit to the Office of the Ethics Counsellor, within 60 days of appointment, a Confidential Report in which they disclose all of their assets, liabilities and outside activities. To obtain copies of the Code and Confidential Report, visit the Office of the Ethics Counsellor's Web site at http://strategis.ic.gc.ca/ethics.

This notice has been placed in the Canada Gazette to assist the Governor in Council in identifying qualified candidates. It is not, however, intended to be the sole means of recruitment. Applications forwarded through the Internet will not be considered for reasons of confidentiality.

Please send your curriculum vitæ by April 24, 2004, to the Deputy Chief of Staff, Parliamentary Affairs and Appointments, Prime Minister's Office, Langevin Block, 80 Wellington Street, Ottawa, Ontario K1A 0A2, (613) 957-5743 (facsimile).

Further information is available on request.

Bilingual notices of vacancies will be produced in alternative format (audio cassette, diskette, Braille, large print, etc.) upon request. For further information, please contact Canadian Government Publishing, Public Works and Government Services Canada, Ottawa, Canada K1A 1M4, (613) 941-5995 or 1-800-635-7943.

[14-1-o]

BANK OF CANADA

Balance Sheet as at March 17, 2004

BANK OF CANADA

Balance Sheet as at March 24, 2004

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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