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Vol. 138, No. 13 — March 27, 2004 Pest Control Products Sales Information Reporting RegulationsStatutory Authority Pest Control Products Act Sponsoring Department Department of Health REGULATORY IMPACT Description Pest control products (pesticides) are regulated in Canada under the federal Pest Control Products Act (PCPA). A new PCPA was given Royal Assent on December 12, 2002, and will be brought into force once existing regulations have been revised and key new regulations have been made. Once in force, the new PCPA will replace the existing PCPA. Under both the existing and new PCPA, a pesticide must be registered by the Minister of Health before it can be used in Canada. A pesticide may not be registered or may not continue to be registered unless its health and environmental risks and its value have been determined to be acceptable by the Minister. All pesticides sold directly to users, known as "end-use products," as well as the active ingredients they contain and manufacturing concentrates, must be registered. An "active ingredient" is the component of a pesticide to which the intended effects of the product are attributed. A company in whose name a pesticide is registered is called a "registrant." Health Canada's Pest Management Regulatory Agency (PMRA) administers the PCPA on behalf of the Minister. One of the new provisions of the new PCPA [subsection 8(5)] is the requirement for registrants, as a condition of registration, to report information on sales of each of their registered pesticides. These proposed Regulations are one of the key regulations that will be made when the new PCPA is brought into force and would specify in detail what information to report and when to report it. Reporting requirements The proposed Regulations would require registrants to submit an annual report to the Minister indicating for each of their registered pesticides the quantity, in kilograms or litres, that was made available for sale to users in each province and territory during the previous calendar year. The sales information would be required for all end-use products, active ingredients and manufacturing concentrates, including products that have emergency or temporary registrations. Registrants would also be required to provide available information on the sales of one or more pesticides within 15 days of a request from the Minister for the purpose of responding to a situation that endangers human health or safety or the environment or if needed in order to make a regulatory decision. With respect to end-use products, in order to get as complete a picture as possible of the quantity of a pesticide available for sale to users in each province and territory, the proposed Regulations would require registrants to report the quantity of their direct sales to users, vendors and provincial distributors plus the quantity sold to vendors and users in each province and territory by regional or national distributors. In addition, the quantity of pesticides made available for sale to users in the form of fertilizer-pesticide and feed-pesticide combination products and treated seeds would be included. For active ingredients and manufacturing concentrates, the proposed Regulations would require registrants to report the quantity sold by the registrant from Canada to another country and the quantity sold by the registrant to formulators of end-use products and manufacturers of fertilizer-pesticide and feed-pesticide combination products in each province and territory. Registrants would also be required to report the quantity of pesticides made available for sale in each province and territory to users in the form of fertilizer-pesticide and feed-pesticide combination products. A registrant who does not have access to the actual information on sales by distributors to vendors or users or on sales of pesticides sold in combination with fertilizers or feeds or as treated seeds would, for the first five years that these proposed Regulations are in force, be permitted to provide an estimate of those quantities if a satisfactory explanation of how the estimate was derived is provided as well. The proposed Regulations would require a registrant submitting an annual report to attach an attestation that the report is true and complete to the best of the person's knowledge and that it is provided in good faith. If the Minister believed on reasonable grounds, on the basis of any information available to the Minister, that the sales information with respect to any product is not accurate or complete, the Minister would have the authority to require the registrant to have the information audited by a qualified independent auditor. In addition, for verification and auditing purposes, registrants would be required to maintain original records and supporting data, in relation to the sales information submitted, for six years from the date the information was submitted to the Minister and to submit those records to the Minister upon request. Starting in 2005, the annual report for the previous calendar year would be required to be submitted by the first day of June each year. The annual report for the calendar year 2003 would be required by October 1, 2004, and registrants would only have to submit information available to them at that time rather than having to retroactively accumulate the information. Disclosure of information According to paragraph 43(4)(c) of the new PCPA, the "monetary value of sales of pest control products provided to the Minister pursuant to subsection 8(5)" is included in the definition of "confidential business information" (CBI) and, therefore, may not be disclosed to the public. Under the proposed Regulations, registrants would not be required to submit the "monetary value" of their sales. To prevent inadvertent discovery of the monetary value of sales, the reports made available to the public by the PMRA would provide information on the quantity of pesticides available for sale to users in each province and territory by active ingredient, rather than by individual product. Since most active ingredients are found in a number of different end-use products, this will prevent inadvertent disclosure of monetary value. In the case of active ingredients that are found in only one end-use product, release of information on the quantity of the active ingredient made available for sale to users could enable calculation of the monetary value of the product's sales. The PMRA would release information on these active ingredients in a way that prevents such disclosure, such as by grouping these active ingredients by type. This circumstance applies to approximately 2.5 percent of currently registered end-use products. Similar measures will be considered where an active ingredient is found in only a small number of end-use products all of which are registered to the same registrant. Other reports could also be made available to the public, for example, total quantity of domestic, commercial or restricted class products made available to users in each province and territory. Detailed information about individual products may be made available in confidence to regulators in other federal or provincial departments or in other countries, to international organizations or to medical professionals. Alternatives There is no alternative to making a regulation as subsection 8(5) of the new PCPA cannot operate until regulations specify what information to report and when to report it. Options were considered pertaining to the level of detail of the reporting requirements, to the reporting of information on pesticides sold in combination with fertilizers or feeds or as treated seeds, and to the reporting of information on active ingredients and manufacturing concentrates. Level of detail of reporting requirements Two options were considered with respect to the level of detail of the reporting requirements: require information at the national level only or require information to be reported by province and territory. National level information would be easier to report and less complex to manipulate but, since use patterns for the same active ingredient vary considerably from one area of the country to another, would make the tracking of reduction trends next to impossible. Requiring information to be reported by province and territory was, therefore, considered to be the best option to meet the intent of the Act. Because it is recognized that some registrants sell to national or regional distributors and, therefore, may not have access to information on the actual quantity made available for sale to users in each province and territory, the proposed Regulations would allow these registrants to provide estimates of these quantities provided that the methodology used to arrive at the estimates is clearly outlined. Furthermore, the methodology chosen would have to be one that provides a sound basis for the estimates. Estimates would be permitted for the first five years that the proposed Regulations are in force in order to provide these registrants with sufficient opportunity to make arrangements to obtain the actual sales information. Combination products and treated seeds Two options were considered: require information on pesticides sold as pest control products only or also require information on pesticides made available to users in the form of fertilizer-pesticide and feed-pesticide combinations and treated seeds. Since the quantities made available to users of some of these products, e.g. weed and feed products, are considerable, it was considered important to include them in order to obtain a clearer understanding of the total quantity of each active ingredient available for sale to users in each province and territory. As with the provincial/territorial information discussed above, the proposed Regulations would allow registrants to provide estimates of these quantities. Active ingredients and manufacturing concentrates Two options were considered: require information on end-use products only or require information on end-use products, active ingredients and manufacturing concentrates. The latter option was considered to be the most appropriate because it would also provide the PMRA with more comprehensive information regarding the availability of hazardous pesticides in Canada in the context of emergency preparedness. Benefits and costs The proposed Regulations would provide significant benefits to the public and the environment while minimizing costs to registrants. Benefits To carry out the primary objective of the new PCPA, to "prevent unacceptable risks to people and the environment from the use of pest control products," the PMRA must be able to assess the continued acceptability of the risks posed by pesticides after they have been registered. These risks are determined by evaluating both the hazard posed by the pesticide and the extent to which people, other living organisms and the environment would be exposed. Thus, in order to regulate pesticides appropriately and efficiently, there is a need for comprehensive information about the sales of pesticides. The provisions of the new PCPA, and of these proposed Regulations, for the reporting of pesticide sales information would provide key exposure information that would contribute to the ability of the PMRA to assess and mitigate health and environmental risks during new product evaluation and re-evaluation and special review of older pesticides. The information would also enable the PMRA and the provinces and territories, to set priorities, follow trends of pesticide sales over time, develop pesticide risk indicators, document risk reduction trends, track the effectiveness of risk reduction efforts, and ensure the provision of best available and consistent information for use in regional, national and international activities on hazardous chemicals. Improving the PMRA's ability to assess and mitigate health and environmental risks and enhancing the overall risk reduction program for pesticides will be of significant benefit to the protection of the health of Canadians and their environment. Registrants could also benefit, since accurate sales information may prevent the overestimation of exposure, thus allowing the continued or expanded use of some pesticides. Thus, the proposed Regulations are an integral part of implementing the strengthened health and environmental protection and support to sustainable pest management promised by the long-awaited new pesticide legislation. The new PCPA and these proposed Regulations will be of particular importance to provincial and territorial regulators. While most jurisdictions currently collect some sales information, they have indicated that, should sales information be obtained through this initiative, they would no longer do so and could instead focus on other complementary activities such as the collection of use information. The combination of sales information obtained from the registrants and use information garnered by the provinces and territories is seen as complementary and will result in a clearer picture of pesticide use. Internationally, the importance of sales data reporting has been recognized by the Working Group on Pesticides of the Organisation for Economic Co-operation and Development (OECD). Member countries agree that data on pesticide use is fundamental to target and track risk reduction programs and to develop pesticide risk indicators, but recognize that the collection of use data is expensive (see Costs to government). Most OECD countries collect sales data as a reasonable surrogate for use information. In addition, the Food and Agriculture Organization of the United Nations in its International Code of Conduct on the Distribution and Use of Pesticides, which has been developed through the joint effort of government experts, non-governmental organizations, the pesticide industry and other United Nations organizations, requires the pesticide industry to provide their national governments with clear and concise data on sales and quantity of pesticides. Costs to industry The costs to registrants are expected to be minimal since it is likely that the required information is already maintained by these registrants during the normal course of business. Registrants of about half of the registered pesticides provided similar information in the 1980s and early 1990s through the Pesticide Registrant Survey (see footnote 1) carried out periodically by Environment Canada and Agriculture and Agri-Food Canada. In addition, some registrants belonging to the national pesticide registrant associations voluntarily contributed sales information for the years 1999 and 2000, in many instances providing the information by province and territory. Registrants would be required to have access to a computer and the Internet and may incur modest costs to prepare the data in the specified format and to submit it to the PMRA. The latter costs would be proportional to the number of registered pesticides and the number of provinces and territories in which they are sold. In 2002, a registrant with approximately 30 products was involved in testing a prototype electronic data entry system and estimated that it would take 1 to 1.5 person-days per year to complete the data entry for those products. The PMRA regulates approximately 900 registrants selling more than 5 500 pest control products. Environment Canada and the PMRA have made arrangements to ensure that pesticide information collected under these proposed Regulations will not be collected in duplicate under Environment Canada's National Pollution Release Inventory. The PMRA will be able to share information with Environment Canada as required to support their requirements. This arrangement will minimize the regulatory burden on registrants. Costs to government The costs to the PMRA will be for the refinement of an electronic data entry system and the database tables to capture and manipulate the sales information and for ongoing activities to maintain and provide reports on the information. The costs of the data entry system and database tables have been and will be minimized by integrating their development into a larger initiative on the electronic infrastructure. Within that larger initiative, it is estimated that the development of the sales reporting module will cost approximately $100,000, significantly less than would be required to collect information on pesticide use. For example, it has been estimated that a statistical survey to determine the use of only 25 percent of registered pesticides would cost approximately $2 million. Ongoing maintenance and reporting activities will be accomplished within existing resources. Conclusion The significant benefits to the pest management regulatory system of collecting sales information, particularly in contributing to risk assessments and the evaluation of risk reduction initiatives, clearly outweigh the costs to industry and government of implementing the proposed Regulations. Evaluation A two-stage comprehensive evaluation of the overall initiative to improve the pest management regulatory system, including implementation of the new PCPA, is planned in 2004-2005 and in 2006-2007. Among the expected outputs of this initiative to improve pesticide regulation is a registry of pesticide information accessible to the public that would include information on the quantity of pesticides available for sale in each province and territory by active ingredient. This output will contribute to the expected immediate outcomes of the initiative, which include increased knowledge by PMRA about pesticides and better-informed public and stakeholders. This is expected to lead to intermediate outcomes of a regulatory system that better protects health and the environment and increases the transparency of pesticide regulation, and final outcomes of increased public and stakeholder confidence in pesticide regulation and protected health and environment. In 2004-2005, a formative evaluation is planned to determine whether the initiative has been implemented, developed and delivered as intended. In 2006-2007, a summative evaluation is planned to determine to what extent the initiative progressed towards expected outcomes. Information on sales will contribute to the evaluation itself as an indicator of risk reduction trends. Annual reports on the performance of the pest management regulatory system will be made through the parliamentary reporting process using the Report on Plans and Priorities and the Departmental Performance Report. Consultation In its 1990 report, (see footnote 2) the multi-stakeholder Pesticide Registration Review Team recommended major reforms to the pest management regulatory system, including the establishment of a national pesticide database. In response, the 1994 (Federal) Government Proposal for the Pest Management Regulatory System accepted most of the recommendations and featured plans to develop this database. The Proposal received wide support across all sectors involved with the regulation of pesticides in Canada, including public interest groups, pesticide manufacturers and users, provinces and territories and other federal departments (Health Canada, Environment Canada, Fisheries and Oceans Canada, Natural Resources Canada, Agriculture and Agri-Food Canada and Industry Canada). While many elements of the Proposal have already been implemented, the national pesticide database could not be implemented until the new PCPA was enacted. In his 1999 report, the Commissioner of the Environment and Sustainable Development was critical of the PMRA's failure to establish a national database respecting pesticide sales. He pointed out that, of the 22 countries responding to a 1997 OECD survey, only Canada and the Slovak Republic did not collect pesticide sales data and he expressed concern that, without such data, Canada had no ability to measure amounts of pesticides used and released into the environment. He added that this information is needed to monitor risks to health, safety and the environment and to measure the extent to which lower-risk pesticides and non-pesticide alternatives have been adopted. These views were echoed by the Standing Committee on Environment and Sustainable Development in its May 2000 report. The Committee recommended that, as a condition of registration, registrants be required to provide the PMRA with their sales data on an ongoing basis. In its response, the federal government completely endorsed the principles set out in the Standing Committee report. In 2002, the Commissioner of the Environment and Sustainable Development again criticized the PMRA for not acting on the Government's 1994 commitment and, in her 2003 report, recommended that the PMRA accelerate and promptly complete the implementation of the sales database. Bill C-53, which sought to replace the existing PCPA with a new Act, was introduced in the House of Commons in March 2002. During the debate in the House and by the Standing Committee on Health, a number of Members of Parliament and witnesses stated that a publicly available national pesticide sales database was a key element of the reforms to the legislation. After Parliament prorogued and the bill was reintroduced as Bill C-8 in October 2002, these views were reiterated during debate in the Senate and by the Standing Committee on Social Affairs, Science and Technology. These proposed Regulations have been developed after several years of discussions with the Federal-Provincial-Territorial Committee on Pest Management and Pesticides (FPT Committee) and its Working Group on the National Pesticides Sales Database. The Working Group includes representatives from the two major pesticide industry associations (CropLife Canada and Canadian Consumer Specialty Products Association), provincial members of the FPT Committee (Alberta Environmental Protection, Québec Ministry of Environment and Ontario Ministry of Agriculture, Food & Rural Affairs), growers (Canadian Federation of Agriculture and Canola Council of Canada) and consumer and environmental non-governmental organizations (Consumers' Association of Canada and World Wildlife Fund). Both the FPT Committee and the Working Group support the development of a single national pesticide sales database. Early notice of these proposed Regulations was provided through Health Canada's Report on Plans and Priorities for both 2002-2003 and 2003-2004. On May 30, 2003, the PMRA published a discussion document titled Preliminary Consultation on Proposed Sales Reporting Regulation. The document was posted on the PMRA Web site for a 30-day comment period and distributed to members of the Pest Management Advisory Council (PMAC), the FPT Committee, the Economic Management Advisory Committee (EMAC), the North American Free Trade Agreement (NAFTA) Technical Working Group on Pesticides and colleagues in Health Canada and other federal departments. Comments were received from 12 respondents, comprising industry associations, registrants, environmental and health non-governmental organizations, a provincial department of the environment and Fisheries and Oceans Canada. The proposal was also discussed at a meeting of PMAC on June 3, 2003, and at a meeting with representatives of pesticide registrants and distributors on September 26, 2003. The issues raised during discussions with the FPT Committee and its Working Group, and in comments received on the discussion document, are summarized below. Level of detail of reporting requirements The pesticide industry has indicated that many of their member companies have only regional level sales information and, in some cases, only national level sales information and therefore could provide provincial/territorial level sales information only with substantial additional effort (for example, by obtaining this information from distributors). On the other hand, public interest groups and provincial/ territorial regulators have clearly stated that the sales information would be of limited usefulness unless it was broken down by province and territory. The proposal that estimates of the provincial/territorial sales could be provided where actual information was unavailable received the support of the pesticide industry and other members of the FPT Working Group. In recognition of the industry concerns regarding the difficulty of obtaining provincial/territorial level information, the length of time for which estimates would be permitted was increased from the two years proposed in the discussion document to five years in these proposed Regulations. While the pesticide industry does not agree that there should be any time limit on the use of estimates, this is considered to be a reasonable period of time for the industry to find ways to obtain the required data. Active ingredients and manufacturing concentrates The pesticide industry has questioned the value of reporting sales information on products that are active ingredients or manufacturing concentrates and warned of the potential for double counting when both the sales of end-use products and of the active ingredients/manufacturing concentrates used in their manufacture are being collected. However, by collecting these data, the PMRA will also be provided with more comprehensive information on the availability of hazardous pesticides in Canada in the context of emergency preparedness. Sales information on these products will be segregated from sales information on end-use products to prevent double counting in the preparation of reports. Reporting available information on request In the discussion document, it was proposed that registrants be required to provide available information on the sales of one or more pesticides within one week of a request from the Minister in an emergency situation. The pesticide industry asked that the term "emergency situation" be defined and recommended that the time limit for provision of the information be increased to two weeks. In response to these comments, the expression "situation that endangers human health or safety or the environment" has been used in the proposed Regulations instead of "emergency situation." This is consistent with terms used in the new PCPA. In addition, the response time for provision of the information has been increased to 15 days, in line with the proposed reporting requirements for severe adverse effects associated with pesticides. Sales versus use information An environmental non-governmental organization disagreed with using sales information as a surrogate for use information, arguing that data on the volume of pesticide products sold by province is no substitute for data on which pesticides are used on which crops. They cited a number of ways site-specific use data would be useful, noted that the new PCPA provides authority for the collection of pesticide use data and recommended that Health Canada and other federal departments move forward with a program to collect pesticide use data without delay. The pesticide industry also expressed concern that information on pesticide sales does not represent actual use information and therefore should not be used in any risk assessments, nor does it provide any information about the success or failure of risk reduction strategies. They did concede however, that it may provide some useful information about use and usage trends over time. It is recognized that sales and not use information is being collected. However, it is also recognized that there is necessarily a very strong correlation between the amount of a pesticide sold and the amount used. As was noted previously, OECD countries have agreed that the collection of use data is expensive and, as a result, most collect sales information as a surrogate for use information. Once the sales database has been established, its effectiveness will be evaluated. Targeted use surveys could be conducted as necessary to supplement or confirm the sales information. Disclosure of pesticide sales information The pesticide industry expressed concern about the public disclosure of sales information both because the information could be used to calculate the monetary value of sales and because the information could create an erroneous perception about the extent of pesticide use. As indicated under "Description," the PMRA will take steps to prevent the inadvertent disclosure of the monetary value of sales. Furthermore, the PMRA will ensure that publicly released reports on pesticide sales clearly state that the figures represent quantities made available for sale to users only. Compliance and enforcement The PMRA has a number of options available to respond to the failure of a registrant to submit sales information for one or more of its registered pesticides. Since the provision of sales information by registrants is a condition of registration under the new PCPA, the registration of a pesticide could be amended or cancelled for such a failure. Alternatively, a penalty could be imposed under the Agriculture and Agri-Food Administrative Monetary Penalties Act or prosecution could be initiated under the new PCPA. As indicated under "Reporting Requirements," if the Minister believed on reasonable grounds, on the basis of any information available to the Minister, that the sales information with respect to any product is not accurate or complete, the Minister would have the authority to require the registrant to have the information audited by a qualified independent auditor. Mr. Cameron Laing, Alternative Strategies and Regulatory Affairs Division, Pest Management Regulatory Agency, Health Canada, Address Locator 6607D1, 2720 Riverside Drive, Ottawa, Ontario K1A 0K9, (613) 736-3665 (telephone), (613) 736-3659 (facsimile), Cameron_Laing@hc-sc.gc.ca (electronic mail). Notice is hereby given that the Governor in Council, pursuant to subsection 67(1) of the Pest Control Products Act (see footnote a), proposes to make the annexed Pest Control Products Sales Information Reporting Regulations. Interested persons may make representations with respect to the proposed Regulations within 75 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice and be sent to Geraldine Graham, Alternative Strategies and Regulatory Affairs Division, Pest Management Regulatory Agency, Department of Health, Address Locator 6607D1, 2720 Riverside Drive, Ottawa, Ontario K1A 0K9 (fax: (613) 736-3659; e-mail: geraldine_graham@hc-sc.gc.ca). Persons making representations should identify any of those representations the disclosure of which should be refused under the Access to Information Act, in particular under sections 19 and 20 of that Act, and should indicate the reasons why and the period during which the representations should not be disclosed. They should also identify any representations for which there is consent to disclosure for the purposes of that Act. Ottawa, March 23, 2004
EILEEN BOYD
The survey has been discontinued in favour of the proposed National Pesticides Sales Database. Recommendations for a Revised Federal Pest Management Regulatory System, Final Report, December 1990. S.C. 2002, c. 28 |
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