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Order Amending Schedule 4 to the Canadian Environmental Protection Act, 1999, Number 5 Statutory Authority Canadian Environmental Protection Act, 1999 Sponsoring Department Department of the Environment REGULATORY IMPACT ANALYSIS STATEMENT Description This Regulatory Impact Analysis Statement (RIAS) describes the listing of the Health of Animals Act (HAA) and the Health of Animals Regulations in Schedule 4 of the Canadian Environmental Protection Act, 1999 (CEPA 99). Listing the HAA in Schedule 4 of the CEPA 99 exempts veterinary biologics that are new biotechnology products under the HAA from additional notification and assessment for toxicity under the CEPA 99. The CEPA 99 allows for substances regulated for uses under other Acts of Parliament and Regulations to be exempt from the CEPA 99 notification and toxicity assessment requirements if those Acts and Regulations provide for notification and assessment of "toxicity." More specifically, the other Acts and Regulations must provide for "notice to be given before manufacture, import or sale of the substance and for an assessment of whether it is toxic or capable of becoming toxic" (subsections 81(6) and 106(6) CEPA 99). The CEPA 99 differs from its predecessor (CEPA, 1988) in subsections 81(7) and 106(7). These subsections grant the Governor in Council with exclusive responsibility to determine whether the CEPA 99 criteria (subsections 81(6) and 106(6)) are met. If the other Act and Regulations meet these criteria to the satisfaction of the Governor in Council, they can be added in Schedule 2 or 4 of the Act. The listing of an Act and Regulations in Schedule 2 or 4 of the CEPA 99 is considered proof that the criteria have been met. The listing of the Health of Animals Act and the Health of Animals Regulations under the CEPA 99 Schedule 4 will avoid a potential regulatory redundancy since both the CEPA 99 and the HAA carry out assessments of new substances for risks to human health and the environment. The listing of the HAA under the CEPA 99 Schedule 4 means the veterinary biologics sector will continue to interact with the Veterinary Biologics Section in the Canadian Food Inspection Agency (CFIA) and will not require a second assessment by Environment Canada and Health Canada. The following discussion shows that environmental and health protection dimensions of the HAA are consistent with the CEPA 99 criteria in subsection 106(6). Notification Requirements under the CEPA 99 and the HAA The New Substances Notification Regulations of the CEPA 99 are an integral part of the federal Government's national pollution prevention strategy. The notification regime serves to ensure that no new substances are introduced into the Canadian environment before an assessment of whether they are potentially toxic has been completed, and any appropriate or required control measures have been taken. The CEPA 99 approach to the control of new substances is both proactive and preventative, employing a pre-import or pre-manufacture notification and assessment process that considers the manufacture, use and disposal of the substance. When this process identifies a new substance that may pose a risk to health or the environment, the Act empowers the Minister of the Environment to intervene prior to or during the earliest stages of its introduction into Canada. This ability to act early makes the new substances program an essential component of the federal Government's approach to the management of toxic substances. Part II.1 (New Substances that are Organisms) of the New Substances Notification Regulations implements sections 104 to 114 of the CEPA 99. The Regulations require notification and assessment of new substances prior to their manufacture in Canada or import into Canada in order to determine whether the substance when entering into the environment would be "toxic" or be capable of becoming "toxic." This assessment considers all stages in the development of the substance from manufacture/import to disposal. Under the CEPA 99, a "substance" means any distinguishable kind of organic or inorganic matter, whether animate or inanimate. The definition of "veterinary biologic" in the HAA includes (a) a helminth, protozoa or micro-organism, (b) a substance or mixture of substances derived from animals, helminths, protozoa or micro-organisms, or (c) a substance of synthetic origin that is manufactured, sold or represented for use in restoring, correcting or modifying organic functions in animals or for use in the diagnosis, treatment, mitigation or prevention of a disease, disorder or abnormal physical state, or the symptoms thereof, in animals; this includes products or organisms derived from biotechnology. Both the CEPA 99 and the Health of Animals Regulations define biotechnology as the application of science and engineering to the direct or indirect use of living organisms or parts or products of living organisms in their natural or modified forms. Hence, substances are covered by both the CEPA 99 and the HAA. Under the HAA, pre-market notification is imposed by means of the requirement that only those veterinary biologics which conform with purity, potency, safety and efficacy requirements are permitted to be imported, sold or used in the country. A person wishing to obtain approval to manufacture, test, or market a veterinary biologic in Canada must submit to the Minister of Agriculture and Agri-Food an application for a Veterinary Biologics Establishment Licence, Veterinary Biologics Product Licence, Veterinary Biologics Import Permit, or Permit To Release Veterinary Biologics. The application must include the information required to permit the health and environmental risks, merit and value of the product to be assessed, and their acceptability to be determined, in accordance with scientific methods and standards. Risk Assessment under the CEPA 99 and the HAA The CEPA 99 defines "toxic" as follows: "64. For the purposes of this Part and Part 6, except where the expression "inherently toxic" appears, a substance is toxic if it is entering or may enter the environment in a quantity or concentration or under conditions that (a) have or may have an immediate or long-term harmful effect on the environment or its biological diversity; (b) constitute or may constitute a danger to the environment on which life depends; or (c) constitute or may constitute a danger in Canada to human life or health." The New Substances assessment conducted under the CEPA 99 takes into account: - the identity of the organism, - if modified, details of the modification, - biological and ecological characteristics, - details respecting how the organism will be imported or manufactured, including equipment, locations, and disposal, - use information, - environmental fate information, - ecological effects information, including data from tests to determine whether the organism is capable of adverse effects on other organisms, and - human health effects information. The data requirements in an assessment routinely conducted by the CFIA-Veterinary Biologics Section (VBS) for a veterinary biologic are specifically tailored to account for properties associated with veterinary biologics. The HAA and Regulations cover manufacturing, testing of products, as well as commercial sale. The VBS assessment of risks to health and the environment are designed to generate a comprehensive set of information on the potential hazards of a veterinary biologic, to provide for the assessment of exposure for all potentially exposed population sub-groups, and to assess the risks to determine if there are adequate margins of safety. Evaluation of environmental fate data makes it possible to determine the behaviour of a veterinary biologic in soil, water and air, the potential for the organism to persist, proliferate and disperse in the environment and the potential for exposure to plants, animals and humans. A product will be registered only if there is sufficient scientific evidence to show that a product does not pose unacceptable health or environmental risks and that it serves a useful purpose. Conditions of registration are specified for every product, including detailed use instructions, and precautions. If the proposed use represents an unacceptable risk, either additional conditions or restrictions are imposed so that the risks are reduced and are brought into an acceptable range, or the registration is denied. An assessment under the HAA is sufficient to make a determination of whether a substance is toxic as defined in section 64 of the CEPA 99. The listing of the Health of Animals Act and Health of Animals Regulations under Schedule 4 of the CEPA 99 is appropriate and will prevent duplication between the two Acts. Alternatives The Minister of Agriculture and Agri-Food, under the Health of Animals Act, has the responsibility for assessing the release of veterinary biologics for environmental safety, including risks to animal and human health. If the HAA were not listed in the CEPA 99 Schedule 4, there would be a duplication of effort because organism-based veterinary biologics that are new substances would be subject to notice assessment under the CEPA 99 in addition to being assessed and registered under the HAA. Therefore, it is recommended that the Health of Animals Act be listed under Schedule 4 of the CEPA 99. Benefits and Costs The proposed amendment to the CEPA 99 Schedule 4 is not anticipated to incur any additional costs to industry. The benefits of the proposed amendment to industry, the public and the environment is that clarity is provided and the Government demonstrates that the federal regulatory regime for new substances with respect to environmental and human health assessment is consistently applied, without duplication. Consultation Consultation of the relationship of the CEPA 99 to other Acts with respect to the assessment of new substances did not commence with the coming into force of the CEPA 99. However, it does mark the beginning of a more public and open process to explain and analyse how other Acts and Regulations meet the CEPA 99 criteria for exemption. In 1986, the Environmental Contaminants Act Amendments Consultative Committee (ECAACC) was the stakeholder forum for consultation on designing the program for notification and assessment of "new substances" that would later be incorporated into the CEPA, 1988. In their final report, the Committee recommended that substances regulated under other Acts, including the HAA, that were subject to environmental and/or health hazard assessment be exempt from the CEPA notification requirements. In 1997, the New Substances Notification Regulations were amended. As part of the amendment, subsection 3(1), which applies to chemicals, polymers and products of biotechnology, was added to clarify that duplication of regulatory efforts should be avoided when possible, specifically: 3. (1) For greater certainty, these Regulations do not apply in respect of a substance that is manufactured or imported for a use that is regulated under any other Act of Parliament that provides for notice to be given prior to the manufacture, import or sale of the substance and for an assessment of whether it is toxic, including, without limiting the generality of the foregoing, the Feeds Act, Fertilizers Act, Health of Animals Act, Pest Control Products Act and Seeds Act. These Regulations were pre-published for public comment in the Canada Gazette, Part I (August 17, 1996). Final regulations appeared in the Canada Gazette, Part II, in March 1997, and included the following text in the RIAS for that amendment: "Following pre-publication, various stakeholders submitted comments to the Department of the Environment. The main issue that emerged from the comments was an interpretation of subsection 3(1) of the amendment, that products regulated under the Seeds Act, Fertilizers Act, Feeds Act, Health of Animals Act, and Pest Control Products Act are exempted from notification under the NSN Regulations. Stakeholders were concerned that this subsection could be misinterpreted as an exemption provision in and of itself and could undermine the legal test for equivalency established by the CEPA. After consideration and discussion with other federal government departments, the Department of the Environment decided to retain this subsection of the Regulations because (a) subsection 3(1) is only meant to clarify, not to determine an exemption; (b) the exemption is determined only by paragraph 26(3)(a) of CEPA [1988]; and (c) the determination of exemption is the sole responsibility of the Minister responsible for the other Act." The Health of Animals Regulations were also pre-published for public comment in the Canada Gazette, Part I (August 17, 1996). In the alternatives section of the Regulatory Impacts Analysis Statement, the regulation of veterinary biologics was proposed under the Health of Animals Regulations or under the CEPA. The Health of Animals Regulations were the alternative chosen. The provisions provided in CEPA 99 for listing other Acts in Schedule 4, which is the purpose of this Order, are intended to provide clarity to the application of the exemption clause which will aid in addressing the above concerns. Compliance and Enforcement There are no compliance and enforcement actions relevant to the CEPA 99 resulting from listing of the Health of Animals Act and Regulations on Schedule 4 of the CEPA 99. Compliance with the Acts that are listed will continue to be conducted by the responsible departments. Contacts Cynthia Wright, Director General, Strategic Priorities Directorate, Environment Canada, Place Vincent Massey, 16th Floor, 351 Saint-Joseph Boulevard, Hull, Quebec K1A 0H3, (819) 953-6830; and Arthur Sheffield, Team Leader, Regulatory and Economic Analysis Branch, Policy and Communications, Environment Canada, Les Terrasses de la Chaudière, 22nd Floor, 10 Wellington Street, Hull, Quebec K1A 0H3, (819) 953-1172. PROPOSED REGULATORY TEXT Notice is hereby given, pursuant to subsection 332(1) of the Canadian Environmental Protection Act, 1999 ( S.C. 1999, c. 33), that the Governor in Council proposes, pursuant to paragraph 106(7)(a) of that Act, to make the annexed Order Amending Schedule 4 to the Canadian Environmental Protection Act, 1999, Number 5. 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 Order 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 General of Strategic Priorities, Environmental Protection Service, 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, January 30, 2001 MARC O'SULLIVAN Assistant Clerk of the Privy Council ORDER AMENDING SCHEDULE 4 TO THE CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999, NUMBER 5 AMENDMENT 1. Schedule 4 to the Canadian Environmental Protection Act, 1999 ( S.C. 1999, c. 33) is amended by adding the following after item 4: *** TABLE EXTRACTED *** COMING INTO FORCE 2. This Order comes into force on the day on which it is registered.
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