Vol. 148, No. 9 — April 23, 2014

Registration

SOR/2014-75 April 4, 2014

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Regulations Amending the PCB Regulations and Repealing the Federal Mobile PCB Treatment and Destruction Regulations

P.C. 2014-351 April 3, 2014

Whereas, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), the Minister of the Environment published in the Canada Gazette, Part I, on June 22, 2013, a copy of the proposed Regulations Amending the PCB Regulations and Repealing the Federal Mobile PCB Treatment and Destruction Regulations, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Regulations or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;

Whereas, pursuant to subsection 93(3) of that Act, the National Advisory Committee has been given an opportunity to provide its advice under section 6 (see footnote c) of that Act;

Whereas, in the opinion of the Governor in Council, pursuant to subsection 93(4) of that Act, the proposed Regulations do not regulate an aspect of a substance that is regulated by or under any other Act of Parliament in a manner that provides, in the opinion of the Governor in Council, sufficient protection to the environment and human health;

And whereas, pursuant to subsection 209(3) of that Act, the Minister has, before recommending the proposed Regulations, offered to consult with the governments of territories to which the proposed Regulations apply and with the members of the National Advisory Committee who are representatives of Aboriginal governments that have jurisdiction over Aboriginal land to which the proposed Regulations apply;

Therefore, His Excellency the Governor General in Council, on the recommendation of the Minister of the Environment and the Minister of Health, pursuant to subsection 93(1) and sections 97, 209 and 286.1 (see footnote d) of the Canadian Environmental Protection Act, 1999 (see footnote e), makes the annexed Regulations Amending the PCB Regulations and Repealing the Federal Mobile PCB Treatment and Destruction Regulations.

REGULATIONS AMENDING THE PCB REGULATIONS AND REPEALING THE FEDERAL MOBILE PCB TREATMENT AND DESTRUCTION REGULATIONS

AMENDMENTS

1. Subsection 1(3) of the PCB Regulations (see footnote 1) is replaced by the following:

Concentration and quantity

(3) For the purposes of these Regulations, the concentration and quantity of PCBs shall be determined by a laboratory

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

3. (1) The portion of subsection 16(1) of the Regulations before paragraph (a) is replaced by the following:

Equipment — subparagraphs 14(1)(d)(i) to (iii)

16. (1) Subject to subsections (2) and (2.1), a person may use the equipment referred to in subparagraphs 14(1)(d)(i) to (iii) until the following dates if the equipment is in use on September 5, 2008:

(2) Subsection 16(3) of the Regulations is replaced by the following:

Current transformers and other equipment

(2.1) A person may, from January 1, 2015 until December 31, 2025, use any current transformers, potential transformers, circuit breakers, reclosers and bushings that are located at an electrical generation, transmission or distribution facility and contain PCBs in a concentration of 500 mg/kg or more if that equipment is in use on September 5, 2008.

Liquid — authorized concentration

(3) A person may use a liquid containing PCBs in a concentration of 2 mg/kg or more but less than 50 mg/kg in equipment until the day on which the liquid is removed from the equipment.

4. Subsections 18(1) and (2) of the Regulations are replaced by the following:

Application — concentration of 50 mg/kg or more

18. (1) Subject to subsection (3), this Part applies to all solids and liquids containing PCBs in a concentration of 50 mg/kg or more that are located at a particular site if the liquids or solids are present in a quantity greater than or equal to

Application — quantity of 1 kg or more

(2) Subject to subsection (3), this Part also applies to all solids and liquids containing PCBs in a concentration of 50 mg/kg or more that are located at a particular site in a quantity of less than 100 L, in the case of liquids, and 100 kg, in the case of solids, if the total quantity of PCBs contained in the liquids or the solids or in the liquids and solids combined, determined in accordance with the following formulas, as applicable, is 1 kg or more:

5. Paragraph 22(1)(b) of the Regulations is replaced by the following:

6. Paragraph 23(b) of the English version of the Regulations is replaced by the following:

7. (1) The portion of subsection 33(1) of the Regulations before paragraph (a) is replaced by the following:

End of use of equipment and liquids — 2009

33. (1) The owner of the equipment referred to in paragraph 16(1)(a) or subparagraph 16(1)(b)(i) — other than the equipment for which an extension is granted by the Minister in accordance with section 17 and the equipment referred to in subsection 16(2) or (2.1) — or of the liquids referred to in subsection 15(2) shall prepare a report that is current to December 31 of each calendar year in which the person owns the equipment or the liquids and that contains the following information:

(2) Paragraph 33(1)(b) of the Regulations is replaced by the following:

(3) The portion of paragraph 33(1)(c) of the Regulations before subparagraph (i) is replaced by the following:

(4) The portion of subsection 33(2) of the Regulations before paragraph (a) is replaced by the following:

Equipment and liquids with extension

(2) The owner of the equipment referred to in paragraph 16(1)(a) or subparagraph 16(1)(b)(i) — other than the equipment referred to in subsection 16(2) or (2.1) — or of the liquids referred to in subsection 15(2) for which an extension is granted by the Minister in accordance with section 17 shall prepare a report that is current to December 31 of each calendar year in which the person owns the equipment or the liquids and that contains the following information for each piece of equipment or container of liquid:

(5) Paragraph 33(3)(a) of the Regulations is replaced by the following:

(6) Section 33 of the Regulations is amended by adding the following after subsection (3):

End of use of equipment — 2025

(4) The owner of the equipment referred to in subsection 16(2.1) shall prepare a report that is current to December 31 of each calendar year in which the person owns the equipment and that contains the following information:

8. Subsection 39(1) of the Regulations is replaced by the following:

Date of submission of report

39. (1) The person who is required to prepare a report in accordance with subsection 33(1), (2) or (4) or with any of sections 34 to 38 shall submit it to the Minister on or before March 31 of the calendar year following the calendar year for which the report is made.

CONSEQUENTIAL AMENDMENT

9. Item 1 of the schedule to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999) (see footnote 2) is repealed.

REPEAL

10. The Federal Mobile PCB Treatment and Destruction Regulations (see footnote 3) are repealed.

COMING INTO FORCE

11. These Regulations come into force on January 1, 2015.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Polychlorinated biphenyls (PCBs) are industrial compounds that are regulated by the PCB Regulations. By 2010, as a result of the accelerated timelines for destruction, roughly 2 850 tonnes or around 40% of PCBs in equipment subject to the PCB Regulations had been destroyed.

The PCB Regulations set an end-of-use deadline of December 31, 2009, for high PCB concentration equipment that contains PCBs in a concentration of 500 mg/kg or more, with the possibility of a use extension up to December 31, 2014, upon application to the Minister of the Environment. However, owners of certain types of high concentration equipment in the utilities sector, namely, current transformers, potential transformers, circuit breakers, reclosers and bushings (hereinafter referred to as “high concentration electrical equipment”), have expressed concern that the current deadline does not provide sufficient time for identification and removal from service of an estimated 500 pieces of high concentration electrical equipment, which are currently in use at electrical generation, transmission or distribution facilities across Canada.

Industry stakeholders estimate that this high concentration electrical equipment represents approximately 1% of all untested equipment containing PCBs currently in use in Canada. The high concentration electrical equipment, which contains an estimated 3.9 tonnes of pure PCBs, is widespread, and the testing for PCB content is not readily feasible because testing can only occur during maintenance shutdowns or other scheduled outages. The regulated community has indicated that a deadline of December 31, 2025, will provide sufficient time to identify and remove from use all high concentration electrical equipment, while avoiding the negative implications of unscheduled power outages.

In addition to the concern expressed by the utilities sector, modifications are needed to the PCB Regulations, including updating references to other legislation, adding text to improve clarity, and addressing some inconsistencies between the English and French versions of the PCB Regulations identified by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR). It is also necessary to repeal the Federal Mobile PCB Treatment and Destruction Regulations (the FMTD Regulations), as they are no longer required.

Background

PCBs are synthesized and commercialized industrial compounds that were used mostly to cool and insulate electrical transformers and capacitors. PCBs are persistent, toxic substances that pose a potential hazard to human health and the environment, and have been banned from manufacture, sale, and import into Canada since 1977.

The PCB Regulations, which came into force on September 5, 2008, were made under the Canadian Environmental Protection Act, 1999 (CEPA 1999) with the objective of addressing the risks posed by the use, storage and release to the environment of PCBs, and to accelerate their destruction. The PCB Regulations set different end-of-use deadlines for equipment containing PCBs at various concentration levels. A preliminary strategic environmental assessment has concluded that extending the end-of-use deadline for certain equipment containing concentrations of PCBs greater than 500 mg/kg may result in a small negative environmental effect if releases were to occur. However, these effects are not considered to be significant due to the very remote possibility of releases occurring.

The regulated community consists of owners of PCBs and equipment containing PCBs primarily in industry sectors such as electric utilities, pulp and paper manufacturing, iron and steel manufacturing, and mining and mineral manufacturing. According to the Canadian Council of Ministers of the Environment, these sectors accounted for approximately 68% of the PCBs and equipment containing PCBs inventory in 2007; the remaining 32% of the PCB inventory was owned by federal and other governments, hospitals and schools, and other miscellaneous industry sectors.

International context

The PCB Regulations were developed to enable Canada to meet its international obligations. Canada is a party to both the United Nations Environment Programme’s Stockholm Convention on Persistent Organic Pollutants (Stockholm Convention) and the United Nations Economics Commission for Europe’s Persistent Organic Pollutants (POPs) Protocol (2003) to the 1979 Convention on Long-range Transboundary Air Pollution (LRTAP).

The Stockholm Convention requires parties to the Convention to make determined efforts to identify, label and remove from use equipment that contains PCBs in various concentrations and volumes by 2025. The LRTAP POPs Protocol requires parties to make determined efforts to remove from use equipment containing high concentration PCBs in specific volumes by a specific date as well as to destroy PCB liquids in an environmentally sound manner. Since the PCB Regulations came into force, timelines in LRTAP POPs Protocol have been changed to align with the Stockholm Convention.

The Federal Mobile PCB Treatment and Destruction Regulations

The FMTD Regulations, made under Part 4 of the Canadian Environmental Protection Act, 1988 (CEPA 1988), came into force on December 14, 1989, and include provisions for permitting mobile treatment and destruction facilities on federal and aboriginal lands. The FMTD Regulations were developed as part of the Federal PCB Destruction Program (the Program). By the time the Program wound up in 1995, permanent hazardous waste (including PCBs) treatment and destruction facilities were already established or planned in several provinces. The operation of these facilities is now regulated and authorized by provincial governments. Furthermore, the FMTD Regulations now fall under Part 9 of CEPA 1999, which does not provide authority to issue operating permits. Therefore, there is no longer a need for the Government of Canada to contract the use of mobile PCB treatment and destruction facilities, which means that the FMTD Regulations are no longer required.

Objectives

The objectives of the Regulations Amending the PCB Regulations and Repealing the Federal Mobile PCB Treatment and Destruction Regulations (the Amendments) are to

Description

The Amendments will extend the end-of-use deadline for high concentration electrical equipment (i.e. current transformers, potential transformers, circuit breakers, reclosers and bushings) that contains PCBs in a concentration of 500 mg/kg or more. The current deadline for this equipment is December 31, 2009; however, some companies who have met certain conditions have an extension up to December 31, 2014. Under the amendments, companies with the specified high concentration equipment will be given until 2025 to phase it out.

In addition, the Amendments will update a legislative reference contained in paragraph 2(2)(b) of the PCB Regulations by changing the reference from “section 4 of the Hazardous Products Act” to “section 5 of the Canada Consumer Product Safety Act.” The Amendments will also correct certain inconsistencies between the English and French regulatory texts and clarify the application of sections 16, 18, 22, 23, 33 and 39.

As part of this regulatory proposal, the FMTD Regulations will be repealed, as they are no longer required.

“One-for-One” Rule

The “One-for-One” Rule applies to the Amendments. Although the Amendments will not impose a new administrative burden on businesses, they will result in an “out” of one regulatory title under the Rule.

The Amendments will make no changes to the reporting requirements of the PCB Regulations. Under the PCB Regulations, PCB equipment owners are required to submit an annual report on their progress in identifying and removing PCBs from use until all of their PCBs are destroyed. Owners of high concentration electrical equipment that will be affected by the Amendments also own other types of PCB equipment, much of which is subject to a regulated end-of-use deadline of 2025 under the PCB Regulations. Under the Amendments, owners of high concentration electrical equipment will report annually on the progress of PCB destruction from all PCB equipment and will have the same level of reporting effort overall. (see footnote 4) As a result, the Amendments will not result in any change to the administrative burden.

The repeal of the FMTD Regulations will not have any impact on the administrative burden of the regulated community.

Small business lens

The small business lens does not apply to the Amendments as there are no costs to small businesses. The Amendments will only affect large utility companies with an average of 3 400 employees. Furthermore, as the FMTD Regulations are no longer required, and they were only applied to PCB treatment and destruction facilities operating on federal lands, the repeal of the FMTD Regulations will have no effect on the small business community.

Consultation

On June 22, 2013, the proposed Regulations Amending the PCB Regulations and Repealing the Federal Mobile PCB Treatment and Destruction Regulations (the proposed Amendments) were published in the Canada Gazette, Part I, for a 60-day comment period. Prior to this publication, Environment Canada and Health Canada informed the governments of the provinces and territories through the CEPA National Advisory Committee (NAC) of the release of the proposed Amendments, and the public comment period mentioned above. No comments were received from CEPA NAC.

During the 60-day public comment period, a total of two submissions were received, one from an industry association and another from an electric utility company. All comments were considered in the development of the Amendments.

Below is a summary of comments received to the proposed Amendments, as well as responses to these comments.

Comment: The industry association indicated that approximately 500 pieces of equipment, which is 1% of the estimated 50 000 pieces of untested equipment across the country, are expected to have PCBs of a concentration of 500 mg/kg or higher and be subject to the Amendments.

Response: This is a clarification of the number of affected high concentration electrical equipment used in this Regulatory Impact Analysis Statement (RIAS).

Comment: The industry association requested clarification as to whether certain types of equipment, which are not listed in the Amendments but have common synonyms for the equipment or components of the equipment listed in section 16(2.1), would also be subject to the Amendments.

Response: Environment Canada will work with industry associations and electricity sector professionals to develop guidance documents and other information that can be used to clarify applicable equipment and uses of equipment under the Amendments. There will be full coverage for all high concentration electrical equipment that serves the function of current transformers, potential transformers, circuit breakers, reclosers, circuit breakers and bushings that are located at electrical distribution, generation and transmission facilities.

Comment: The industry association and the electrical utility company expressed concern as to how the transition would occur regarding reporting the status of equipment from the current end-of-use extension process under section 17 of the PCB Regulations to the implementation of the process that would be in place for the specific high concentration electrical equipment listed in section 16(2.1) of the Amendments.

Response: Under Section 17 of the PCB Regulations, the latest date for end-of-use extensions for high concentration electrical equipment granted by the Minister is December 31, 2014. The Amendments will come into force on January 1, 2015, and hence there will be no overlap of dates. The specific high concentration electrical equipment listed in section 16(2.1) of the Amendments that were subject to the end-of-use extensions under section 17 of the PCB Regulations will automatically be covered under the Amendments. All other PCB equipment will have to be removed from service by the end-of-use date of their extension. PCB equipment owners with equipment subject to the Amendments that had an end-of-use extension that expired after December 31, 2014, will not have to reapply to the Minister to be covered by the Amendments for the equipment listed in section 16(2.1).

Comment: The industry association requested clarification about why the reporting frequency for equipment listed in section 16(2.1) is every year, whereas equipment in section 16(2) is reported every four years under the Amendments.

Response: Equipment listed in section 16(2.1) of the Amendments is usually equipment for which an end-of-use extension to December 31, 2014, has been granted under section 17 of the PCB Regulations with annual reporting requirement. Reporting requirements for equipment in section 16(2.1) of the Amendments will be a continuation of the current reporting schedule under the PCB Regulations. There will be no additional reporting required as a result of the Amendments.

Rationale

In the RIAS published along with the proposed Amendments in the Canada Gazette, Part I, the associated costs and benefits were assessed based on 50 000 pieces of high concentration electrical equipment. During the 60-day public comment period, an industry association clarified that approximately 500 pieces of high concentration electrical equipment will be subject to the Amendments. Therefore, the associated costs and benefits have been reassessed, which represent approximately 1% of the initial assessment.

The Amendments will extend the deadline for removal and destruction of PCBs in roughly 500 pieces of high concentration electrical equipment from December 31, 2009, to December 31, 2025. This will provide the regulated community with sufficient time for identifying, transporting and destroying PCBs from existing equipment while spreading out the costs of compliance and avoiding unscheduled power outages. To estimate the impacts, this analysis incorporates the same methodology developed for Environment Canada in support of the Regulatory Impact Analysis Statement for the PCB Regulations, which included estimates on the costs of decommissioning per equipment type and scientific assumptions on PCB releases from equipment and the risks of spills and fires derived from the United States Environmental Protection Agency. (see footnote 5)

For the purposes of this analysis, the assumption is made based on the best information available that the Amendments will affect owners of the roughly 500 pieces of high concentration electrical equipment who have end-of-use extensions to December 31, 2014. It is also assumed that regulatees will start to decommission and replace an equal number of pieces of high concentration electrical equipment on average every year, with the entire stock of 500 pieces of equipment replaced by either 2014 or 2025. Given this pace of compliance, it is estimated that a present value cost of $730,000 (3% discount rate) would occur in order for the 2014 end-of-use deadline to be met compared with a present value cost of $620,000 for the 2025 end-of-use deadline to be met, which implies an incremental decrease in compliance costs in present value terms of approximately $110,000, or around $7,000 per year. However, this is a conservative estimate as it does not take into account the value of avoided disruptions to the electricity supply that may also occur if regulatees were forced to meet the end-of-use 2014 deadline.

These benefits to industry will be offset by costs for the potential increase in environmental releases of PCBs from spills and fires. The potential increase in spills and fires will be a direct cost to owners of high concentration electrical equipment in terms of increased costs of cleaning up spills and mitigating damages from fires involving PCBs, which consist primarily of replacing, transporting and destroying PCBs. Using the same model as sourced above, the present value of these additional costs to electrical equipment owners is estimated to be approximately $5,000 in total over the period.

The extension of the end-of-use deadline will also result in a slower phase-out rate of high concentration electrical equipment, and could therefore result in greater potential damage to the environment. It is estimated that up to an additional 0.9 kg of PCBs could be released between 2015 and 2025 (or 0.01 kg per year on average) as a result of the Amendments.

As the releases of PCBs are expected to be low, the potential environmental impact is expected to be negligible. Moreover, even though PCBs are recognized as a potential hazard to human health, the full extent of human health implications remains unknown. All Canadians are exposed to very small amounts of PCBs through food intake and, to a lesser extent, through air, soil and water. As a result, all Canadians have PCBs in their bodies, which makes linking specific adverse health effects to PCBs released from the equipment very difficult to isolate and assess. However, given the small amount of PCB releases, the environmental and health impact of the Amendments is expected to be low.

The Amendments will not have an impact on Canada’s international agreements and obligations. Canada is a party to both the Stockholm Convention and the 1979 Convention on LRTAP, which require parties to make determined efforts to identify, label and remove PCBs from in-use high concentration equipment by 2025. The Amendments to the PCB Regulations will continue to respect this time frame.

Conclusion

The Amendments will ensure the timely and orderly removal and destruction of PCBs from high concentration electrical equipment without unscheduled power outages or violating Canada’s international commitments. The incremental reduction in the present value cost of compliance is expected to be at least $110,000, with incremental costs to utility owners for greater spills and fires of roughly $5,000 over the period. This regulatory initiative will also make necessary modifications and alignments to the English and French regulatory texts, add clarity to other sections of the PCB Regulations, as well as repeal the FMTD Regulations as these are no longer required. Given the small amount of PCBs expected to be released over the period, impacts on the environment and human health are expected to be low. Therefore, the Amendments are expected to have an overall positive impact.

Contacts

Ms. Sharon Dunlop
Senior Officer
PCB and Storage Tank Programs
Waste Reduction and Management Division
Environment Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-4950
Fax: 819-997-3068
Email: Sharon.Dunlop@ec.gc.ca

Mr. Yves Bourassa
Director
Regulatory Analysis and Valuation Division
Environment Canada
10 Wellington Street, 25th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-7651
Fax: 819-953-3241
Email: RAVD.DARV@ec.gc.ca