Canada Gazette, Part I, Volume 157, Number 24: Regulations Amending the Formaldehyde Emissions from Composite Wood Products Regulations

June 17, 2023

Statutory authority
Canadian Environmental Protection Act, 1999

Sponsoring departments
Department of the Environment
Department of Health

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Following publication of the Formaldehyde Emissions from Composite Wood Products Regulations (the Regulations), stakeholders alerted the Government of Canada (the Government) of a drafting oversight in the Regulations. Amendments are required to address the oversight regarding the quality control testing requirements for composite wood panel manufacturers, and to clarify record-keeping, particularly for downstream supply chain regulated parties (e.g. retailers). In addition, minor amendments are proposed to improve clarity for regulated parties, enhance enforceability by requiring certain records to be kept in Canada, and align the Regulations with changes to the United States (U.S.) Toxic Substances Control Act (TSCA) Title VI adopted on February 21, 2023.

Background

The Regulations were published in the Canada Gazette, Part II, on July 7, 2021, and came into force on January 7, 2023. They aim to reduce potential risks to the health of Canadians from indoor formaldehyde exposure by establishing limits on allowable formaldehyde emissions from composite wood products. Formaldehyde in indoor air can cause irritation of the eyes, nose and throat, and evidence indicates it may worsen asthma symptoms, especially in children. The Regulations prohibit the import, sale or offer for sale of composite wood products that emit formaldehyde above established limits, and align with TSCA Title VI to the extent possible. This facilitates regulatory harmonization and a level international playing field.

A drafting oversight in the Regulations implies that panel manufacturers must use an accredited laboratory to comply with quality control testing requirements, which was not the intended policy. In addition, requiring downstream regulated parties to collect declarations of certification (declarations) for all composite wood panels that may have been incorporated into the finished goodsfootnote 1 they import, distribute or sell, could impose a burden that was not intended in the Regulations. Correcting the drafting oversight is critical to the effective administration and interpretation of the Regulations. The proposed amendments would clarify the quality control testing and record-keeping requirements. Without the proposed amendments, regulated parties would incur unanticipated costs in order to comply with the Regulations, and for record-keeping.

Objective

The proposed amendments aim to address the following issues:

Description

Quality control testing

Under the Regulations, testing of formaldehyde emissions from composite wood panels is required quarterly using primary testing methods, and at more frequent intervals using quality control testing methods. The Government’s policy intent for the Regulations was that primary testing must be performed by an accredited laboratory, but that quality control testing typically carried out routinely in production mills would not require to be performed by an accredited laboratory. While the use of an accredited laboratory is specified for primary testing requirements in section 7(1)(b) of the Regulations, and not specified for quality control testing under section 8(1), section 17 unintentionally requires that “any” formaldehyde emissions testing be performed by an accredited laboratory. Requiring accredited laboratories for the large volume of quality control tests is out of alignment with TSCA Title VI and not feasible as it would impose an excessive burden on regulated parties. To remove this risk of potential adverse burden on regulated parties, and align with TSCA Title VI, amendments to the Regulations are proposed so that only the primary testing must be done by an accredited laboratory, while the routine quality control testing conducted within mills could be done using less expensive testing methods. The timing of the primary testing requirements would enable specimen selection to occur within each designated time period, and all testing and verification requirements to be completed within 90 days. This would better align with the Government policy, whereby primary testing can occur at any time, so long as testing is spread quarterly throughout the year.

Record-keeping

Declarations are produced by composite wood panel and laminated product manufacturers to declare that their products have been tested for formaldehyde emissions by a qualified third-party certifier according to the Regulations, and are below the established limits. This is a key record-keeping requirement passed down and maintained by all regulated parties along the supply chain. Following the publication of the Regulations, the Government heard from concerned industry stakeholders that collecting and maintaining declarations of certification would pose an excessive burden on importers and sellers of finished goods due to the large number of declarations that can be associated with each finished good item, in addition to the large volume of types of finished goods carried by retailers. Amendments are proposed to clarify record-keeping requirements for manufacturers, importers and sellers of finished goods. In order to maintain a requirement for a proof of certification of composite wood products, the requirement to collect declarations for each type of composite wood panel within a finished good would be clarified to require a single manufacturer’s attestation affirming that only certified panels were incorporated into the finished good.

Minor amendments

Minor amendments are proposed to clarify certain requirements and correct minor technical aspects in the Regulations. Two amendments related to non-compliant lots are proposed, one clarifying retesting methods and another changing the notification period from “two days” to “72 hours” to correspond to TSCA Title VI. An amendment is also proposed to indicate that builders/renovators/installers of composite wood products are not considered “sellers” under the Regulations. Three amendments related to declarations requirements are proposed to (1) require that declarations must be prepared in one or both official languages, (2) remove the requirement that the name of the third-party certifier contact person appears on the declarations, and (3) add the name and address of the mill where the certified product types are manufactured. Furthermore, to enhance enforceability, minor changes are proposed to require that certain records (such as dates of purchase of composite wood products) be maintained in Canada, rather than being provided within 40–60 days upon request. Finally, a number of non-substantive amendments are proposed to better align the English and French versions of the regulatory text.

Align with U.S. EPA amendments to TSCA Title VI Rule

On February 21, 2023, the U.S. EPA published final amendments to TSCA Title VI to update voluntary consensus standards, make changes to rules for third-party certifiers and bring the Rule in line with the California Air Resources Board (CARB) Regulations for formaldehyde-containing composite wood products. Given the degree of cross-border trade in composite wood products, the Regulations aim to align with TSCA Title VI. The Government has reviewed the final changes to TSCA Title VI and determined that two of the amendments would impact the Regulations. The proposed CANFERfootnote 2 Amendments would incorporate the following U.S. EPA changes which have been adopted into TSCA Title VI:

Consultation

Since the publication of the Regulations in CGII on July 7, 2021, the Government has been engaged in discussions with key stakeholders from the composite wood products industry, including the Composite Panel Association (CPA), Retail Council of Canada (RCC), Business and Institutional Furniture Manufacturers Association (BIFMA), Kitchen Cabinet Manufacturers Association (KCMA), and the American Home Furnishings Alliance (AHFA). Stakeholders reached out to the Government for virtual meetings to discuss the Regulations and its impacts on their industry. Government officials also provided regulatory updates for members of the CPA and RCC during their annual meetings in September 2022. Stakeholders raised the following issues:

Issue: Requiring accredited laboratories for regular quality control testing (s. 17) is not feasible.

Response: The Government acknowledges that requiring accredited laboratories to carry out the routine quality control testing was not the policy intent and that a regulatory amendment would be required to address this issue.

Issue: Requiring importers and sellers of finished goods to keep records of all the declarations from the composite wood panels incorporated into finished goods is very burdensome.

Response: The Government proposes to amend the Regulations to clarify and simplify the record-keeping requirements and reduce the unanticipated burden signalled by regulated parties.

Issue: Minor issues dealing with non-compliant lots, including sampling and test method used for retesting, and the notification period of 2 days in CANFER rather than the 72 hours permitted in TSCA.

Response: The Government proposes to indicate in guidance that the test method for retesting should be the same as that used to determine the non-compliant lot and proposes to amend the Regulations to allow a 72-hour notification period rather than 2 days. The Government decided to take no action on addressing the sampling for retesting, as it appears to be the result of the Regulations being organized differently than TSCA, while still achieving the same substantial effect.

Issue: Requiring a contact person for the third-party certifiers within the declarations is a perceived burden, as stakeholders believe the declarations must be updated every time there is a new contact person.

Response: The Government proposes to amend the Regulations to remove the third-party certifier contact person from the required contents of the declarations, and in the interim has clarified in guidance that a new declaration would not be required based only on the change of the third-party certifier contact person.

In addition to the targeted stakeholder consultations, the Government has been responding regularly to inquiries about the Regulations from industry stakeholders submitted through the Health Canada Formaldehyde email account (formaldehyde-formaldehyde@hc-sc.gc.ca). As of the start of December 2022, the Government has responded to more than 125 inquiries. These inquiries have covered a range of topics, with the majority of the questions pertaining to responsibilities of manufacturers, importers and retailers, especially where these responsibilities deviate from those under TSCA Title VI. There have also been a large number of inquiries from stakeholders seeking information on the role of the third-party certifiers under the Regulations.

Modern treaty obligations and Indigenous engagement and consultation

An Assessment of Modern Treaty Implications was conducted for the Regulations, and there were no modern treaty implications identified. It is therefore anticipated that the proposed amendments would not have any modern treaty obligations.

Instrument choice

A regulatory amendment is the only instrument available to correct the drafting oversight by modifying the Regulations. Non-regulatory options for correcting it were considered and were determined to not be viable.

Regulatory analysis

Costs

Regulated parties are not expected to incur incremental costs as a result of the proposed amendments. The proposed amendments align with the original policy intent of the Regulations, by clarifying that only primary testing (and not quality control testing) must be done by an accredited laboratory. Record-keeping requirements would also be clarified.

Canadian manufacturers of composite wood panels are required to be compliant with the TSCA Title VI in order to export their products to the U.S. Given that most of them are already compliant, the proposed amendments aligning with TSCA Title VI are not expected to impose additional costs on regulated parties. Additional minor amendments to enhance enforceability and align the Regulations with U.S. EPA changes to the TSCA Title VI are not anticipated to impose additional costs on regulated parties.

Communications and compliance promotion to alert stakeholders of the proposed amendments would be undertaken and the guidance document would be updated; such costs to Government are expected to be negligible. The proposed amendments are not expected to impact Canadian consumers.

Benefits

A qualitative assessment of potential implications on regulated parties of the drafting oversight in the absence of the proposed amendments was undertaken. It was determined that stakeholders would likely incur unintended, additional compliance costs linked to routine quality control testing being performed by an accredited laboratory. The proposed amendments are designed to reduce the risk of such unintended application of the Regulations, thereby keeping impacts in line with what was assessed for the Regulations.

Stakeholders would benefit from the proposed amendments to clarify reporting and record-keeping requirements for finished goods along the composite wood products supply chain. Without the proposed amendments, importers and sellers of finished goods are required to keep records of all the declarations from the composite wood panels incorporated into finished goods, which is burdensome and inconsistent with what was originally intended. The proposed amendments aim to clarify and simplify reporting and record-keeping requirements and align the associated administrative burden with what was intended in the Regulations.

Canadian composite wood products manufacturers, sellers and importers that operate in the U.S. would benefit from reduced inconsistencies and greater alignment with TSCA Title VI, given the high level of market integration between the two countries, and given that the U.S. is Canada’s largest trading partner.

Small business lens

Regulated parties that are small businesses are not expected to incur additional costs as a result of the proposed amendments. Since most small businesses operate further down the supply chain, clarifying reporting and record-keeping requirements would benefit small businesses, as they would not have to incur unintended costs to maintain proof of certification of composite wood products, and collect statements of certification for each type of composite wood panel found in a finished good they sell or import. These amendments are intended to respond directly to feedback from businesses (including small businesses) to the issues described and thus reduce potential costs or risks arising from unintended consequences of the Regulations as currently drafted.

One-for-one rule

The one-for-one rule does not apply to these proposed amendments, as there is no change (no increase or decrease) in the intended administrative burden to businesses from what was assessed for the original Regulations. While the amendments would reduce administrative burden costs, this reduction is a result of removal of requirements that were not properly captured as they were unintended, when introduced, and as such are not eligible to be used for compliance purposes under the Red Tape Reduction Act.

Regulatory cooperation and alignment

The Regulations align with U.S. TSCA Title VI on formaldehyde emission limits, product types covered and the need for certified oversight of emissions testing. The proposed amendments would maintain alignment with TSCA Title VI to the extent possible, by incorporating into CANFER the changes to the U.S. Rule adopted on February 21, 2023. These amendments would not impact existing differences between CANFER and TSCA Title VI, addressing unique Canadian circumstances and the Canadian legal and legislative framework. The proposed amendments are not expected to have other impacts on regulatory cooperation.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a strategic environmental assessment (SEA) was completed for Canada’s Chemical Management Plan (CMP). The proposed amendments fall within the scope of the SEA conducted for the CMP, which indicated the CMP would have a positive effect on the environment and human health.

Gender-based analysis plus

A gender-based analysis plus (GBA+) was conducted for the Regulations. No impacts based on gender, sex, age, language, education, geography, culture, ethnicity, income, ability, sexual orientation, and gender identity have been identified for the proposed amendments. No concerns have been expressed by stakeholders or the public regarding the proposed amendments.

Implementation, compliance and enforcement, and service standards

Compliance promotion and enforcement activities for the existing Regulations will continue for the regulated parties. As the Regulations are made under CEPA, enforcement officers will, when verifying compliance with the Regulations, apply the Compliance and Enforcement Policy for CEPA,footnote 4 This Policy sets out the range of possible responses to alleged violations, including warnings, directions, environmental protection compliance orders, tickets, ministerial orders, injunctions, prosecution and environmental protection alternative measures (which are an alternative to a court prosecution after the laying of charges for a CEPA violation). In addition, the Policy explains when the Government of Canada will resort to civil suits by the Crown for cost recovery.

The proposed amendments are proposed to come into force three months following publication in the Canada Gazette, Part II.

Contacts

Andrew Beck
Director
Risk Management Bureau
Safe Environments Directorate
Health Canada
269 Laurier Avenue West
Ottawa, Ontario
K1A 0K9
Email: formaldehyde-formaldehyde@hc-sc.gc.ca

Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Environment and Climate Change Canada
200 Sacré-Cœur Boulevard
Gatineau, Quebec
K1A 0H3
Email: darv-ravd@ec.gc.ca

PROPOSED REGULATORY TEXT

Notice is given, under subsection 332(1)footnote a of the Canadian Environmental Protection Act, 1999 footnote b, that the Governor in Council, on the recommendation of the Minister of the Environment and the Minister of Health, under subsection 93(1) of that Act, proposes to make the annexed Regulations Amending the Formaldehyde Emissions from Composite Wood Products Regulations.

Any person may, within 75 days after the date of publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or, within 60 days after the date of publication of this notice, file with the Minister 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. Persons filing comments are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website. Persons filing comments by any other means, and persons filing a notice of objection, should cite the Canada Gazette, Part I, and the date of publication of this notice, and send the comments or notice of objection to Director, Forest Products and Fisheries Act Division, Department of the Environment, 351 Saint-Joseph Boulevard, Gatineau, Quebec, K1A 0H3 (email: formaldehyde@ec.gc.ca).

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

Ottawa, June 8, 2023

Wendy Nixon
Assistant Clerk of the Privy Council

Regulations Amending the Formaldehyde Emissions from Composite Wood Products Regulations

Amendments

1 (1) Section 1 of the Formaldehyde Emissions from Composite Wood Products Regulations footnote 5 is amended by adding the following in alphabetical order:

accredited laboratory
means a laboratory that meets the following conditions at the relevant time:
  • (a) it is accredited
    • (i) under the International Organization for Standardization standard ISO/IEC 17025, entitled General requirements for the competence of testing and calibration laboratories, by an accrediting body that is a signatory to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement, or
    • (ii) under the Environment Quality Act, CQLR, c. Q-2; and
  • (b) the scope of its accreditation includes testing to measure formaldehyde emissions from composite wood panels or laminated products. (laboratoire accrédité)

(2) The definition Directive in section 1 of the Regulations is replaced by the following:

Directive
means the Directive concerning testing for formaldehyde emissions, dated June 2023 and published by the Government of Canada on its website. (Directive)

2 The Regulations are amended by adding the following after section 4:

Non-application — installers

4.1 For the purposes of these Regulations, a person that only installs composite wood products is not considered to be a person that sells or offers those products for sale.

3 Section 5 of the Regulations is amended by striking out “and” at the end of paragraph (b) and by adding the following after paragraph (b):

4 (1) The portion of subsection 7(2) of the Regulations before paragraph (a) is replaced by the following:

Frequency

(2) The testing and verification must be performed during the 90–day period that begins on the day the specimen is selected and the selection must be performed four times annually, beginning during the following periods:

5 Paragraph 10(3)(c) of the Regulations is replaced by the following:

6 Paragraph 11(5)(c) of the Regulations is replaced by the following:

7 Subsections 16(4) and (5) of the Regulations are replaced by the following:

Re-test

(4) For the purpose of subsection (2), a non-compliant lot is re-tested

Notice of non-compliance to purchaser

(5) A person that has sold a composite wood panel or laminated product from a non-compliant lot must provide written notice of the non-compliance to the purchaser within 72 hours after the day on which the person becomes aware of the non-compliance.

8 Section 17 of the Regulations and the heading before it are repealed.

9 Paragraph 18(c) of the Regulations is replaced by the following:

10 (1) The portion of subsection 19(2) of the Regulations before paragraph (a) is replaced by the following:

Contents of declaration

(2) The declaration of certification must be produced in English or French or both languages and include

(2) Paragraph 19(2)(a) of the French version of the Regulations is replaced by the following:

(3) Paragraph 19(2)(b) of the Regulations is replaced by the following:

11 The Regulations are amended by adding the following after section 19:

Attestation

19.1 (1) A manufacturer of component parts or finished goods may produce an attestation for the component parts or finished goods it manufactures if a declaration of certification has been produced under paragraphs 19(1)(a) or (b) for each product type that is incorporated into the component part or finished good.

Contents of attestation

(2) The attestation must be produced in English or French or both languages and include the following information:

Invalidity — attestation

(3) The attestation ceases to be valid if the declaration of certification for a product type that is incorporated into the component part or finished good ceases to be valid in one of the cases set out in subsection 19(3).

New attestation

(4) If the attestation ceases to be valid and the manufacturer referred to in subsection 19(1) amends the declaration of certification to reflect that it is valid again for the product type or produces a new declaration of certification for that product type in accordance with subsection 19(4), the manufacturer referred to in subsection (1) may amend the attestation to reflect that it is valid again or may produce a new attestation.

12 Subparagraph 20(1)(c)(i) of the French version of the Regulations is replaced by the following:

13 (1) Subsection 26(1) of the Regulations is amended by adding the following after paragraph (c):

(2) Paragraph 26(2)(b) of the French version of the Regulations is replaced by the following:

(3) Subsection 26(3) of the Regulations is replaced by the following:

Disclosure to Minister

(3) On request, the manufacturer must provide the Minister with any of the information and documents referred to in subsection (1) within 14 days after the day on which the request is made.

(4) Subsections 26(5) and (6) of the Regulations are repealed.

14 (1) Paragraph 27(2)(b) of the French version of the Regulations is replaced by the following:

(2) Subsection 27(3) of the Regulations is replaced by the following:

Disclosure to Minister

(3) On request, the manufacturer must provide the Minister with any of the information and documents referred to in subsection (1) within 14 days after the day on which the request is made.

15 (1) Subsection 28(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(2) Paragraph 28(2)(b) of the French version of the Regulations is replaced by the following:

(3) Subsection 28(3) of the Regulations is replaced by the following:

Disclosure to Minister

(3) On request, the importer must provide the Minister with any of the information and documents referred to in subsection (1) within 14 days after the day on which the request is made.

(4) Paragraphs 28(4)(a) to (d) of the Regulations are repealed.

(5) Subsection 28(5) of the French version of the Regulations is replaced by the following:

Délai — communication additionnelle

(5) L’importateur fournit au ministre les renseignements visés au paragraphe (4), en français, en anglais ou dans les deux langues, soit dans les quarante jours suivant la date de la demande, soit dans les soixante jours suivant cette date si les renseignements doivent être traduits d’une langue autre que le français ou l’anglais.

16 (1) Subsections 29(1) and (2) of the Regulations are replaced by the following:

Manufacturer — component parts or finished goods

29 (1) A manufacturer of component parts or finished goods must retain, in English or French or both languages, a copy of the declaration of certification referred to in section 19 for the product types that are incorporated into the component parts or finished goods.

Manufacturer — attestation

(1.1) A manufacturer of component parts or finished goods must retain, in English or French or both languages, a copy of the attestation referred to in section 19.1 for the component parts or finished goods that it manufactures.

Importer — component parts or finished goods

(1.2) An importer of component parts or finished goods must retain a record of the following information and documents in English or French or both languages:

Exempted laminated products

(2) Despite subsection (1), for any laminated product referred to in subsections 7(4) and 8(5) that is incorporated into a component part or finished good, the manufacturer must retain a copy of the declaration of certification referred to in section 19 only for any composite wood panel that constitutes the core or platform of the laminated product.

(2) Subsections 29(4) and (5) of the Regulations are replaced by the following:

Retention period and location — manufacturer

(4) The declaration of certification referred to in subsections (1) and (2), the attestation referred to in subsection (1.1), and the notice and information referred to in subsection (3) must be retained for a period of five years after the day on which they are made at one of the following locations:

Retention period and location — importer

(4.1) The attestation referred to in subsection (1.1) must be retained for a period of five years after the day on which it is made at one of the following locations:

Disclosure to Minister — manufacturer

(5) On request, the manufacturer must provide the Minister with a copy of the declaration of certification referred to in subsections (1) and (2), a copy of the attestation referred to in subsection (1.1), and a copy of any written notice and information referred to in subsection (3) within 14 days after the day on which the request is made.

Disclosure to Minister — importer

(5.1) On request, the importer must provide the Minister with a copy of the attestation referred to in subsection (1.1) within 14 days after the day on which the request is made.

(3) Paragraph 29(6)(d) of the French version of the Regulations is replaced by the following:

(4) Subsection 29(7) of the French version of the Regulations is replaced by the following:

Délai — communication additionnelle

(7) L’importateur fournit au ministre les renseignements visés au paragraphe (6), en français, en anglais ou dans les deux langues, soit dans les quarante jours suivant la date de la demande, soit dans les soixante jours suivant cette date si les renseignements doivent être traduits d’une langue autre que le français ou l’anglais.

17 (1) Subsections 30(1) and (2) of the Regulations are replaced by the following:

Seller — panels or laminated products

30 (1) A person that sells or offers for sale composite wood panels or laminated products must retain, in English or French or both languages, a copy of the declaration of certification referred to in section 19 for the product types that it sells or offers for sale.

Exempted laminated products

(2) Despite subsection (1), for any laminated product referred to in subsections 7(4) and 8(5) that the person sells or offers for sale, the person must retain a copy of the declaration of certification referred to in section 19 only for any composite wood panel that constitutes the core or platform of the laminated product.

(2) Paragraph 30(3)(b) of the Regulations is replaced by the following:

(2) The Regulations are amended by adding the following after subsection 30(3):

Disclosure to Minister — seller

(4) On request, the person referred to in subsection (1) must provide the Minister with a copy of the declaration of certification referred to in subsections (1) and (2) within 14 days after the day on which the request is made.

18 The Regulations are amended by adding the following after section 30:

Seller — component parts or finished goods

30.1 (1) A person that sells or offers for sale component parts or finished goods must retain, in English or French or both languages, a copy of the finished goods attestation referred to in section 19.1 for the component parts or finished goods that it sells or offers for sale.

Retention period and location

(2) The finished goods attestation must be retained for a period of five years after the day on which it is made at one of the following locations:

Disclosure to Minister — seller

(3) On request, the person referred to in subsection (1) must provide the Minister with a copy of the finished goods attestation within 14 days after the day on which the request is made.

19 Section 33 of the French version of the Regulations is replaced by the following:

Produit lamellé

33 Les articles 5 à 9, 11 à 19 et 26 à 30 ne s’appliquent pas à l’égard du produit lamellé, à l’exclusion de l’âme ou de la plateforme, pendant une période de cinq ans à compter de suivant la date d’entrée en vigueur du présent règlement.

Coming into Force

20 These Regulations come into force on the 90th day after the day on which they are published in the Canada Gazette, Part II.

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