Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations: SOR/2023-15

Canada Gazette, Part II, Volume 157, Number 4

Registration
SOR/2023-15 February 3, 2023

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

P.C. 2023-65 February 3, 2023

Whereas, under subsection 332(1)footnote a of the Canadian Environmental Protection Act, 1999 footnote b, the Minister of the Environment published in the Canada Gazette, Part I, on July 3, 2021, a copy of the proposed Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations, substantially in the annexed form, under the title Prohibiting the Manufacture and Import of Wheel Weights Containing Lead in Canada Regulations, 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, under subsection 93(3) of that Act, the National Advisory Committee has been given an opportunity to provide its advice under section 6footnote c of that Act;

And whereas, in the opinion of the Governor in Council, under 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;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment and the Minister of Health, makes the annexed Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations under subsection 93(1) of the Canadian Environmental Protection Act, 1999 footnote b.

Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations

Definition

Definition of vehicle

1 In these Regulations, vehicle has the same meaning as in section 2 of the Motor Vehicle Safety Act.

Application

Wheel weights

2 (1) Subject to subsection (2), these Regulations apply in respect of wheel weights containing lead that are designed to balance the wheels of a vehicle.

Non-application

(2) These Regulations do not apply in respect of wheel weights that are in transit through Canada, from a place outside Canada to another place outside Canada.

Prohibition

Prohibited activities

3 (1) A person must not manufacture or import wheel weights containing more than 0.1% lead by weight, except in accordance with a permit issued under section 5.

Exception

(2) The prohibition in subsection (1) does not apply in respect of

Permits

Application for permit

4 (1) An application for a permit must include the information specified in the schedule and be submitted to the Minister not later than the 90th day before the day on which the wheel weights containing lead are to be manufactured or imported.

Certification

(2) The application must be accompanied by a certification, dated and signed by the applicant or by their authorized representative, stating that the information contained in the application is accurate and complete.

Conditions of issuance

5 (1) Subject to subsection (2), the Minister may issue a permit to manufacture or import wheel weights containing lead for the term requested in the application for a permit if

Permit term

(2) The term of the permit must not exceed 24 months.

Refusal

(3) The Minister must refuse to issue a permit if the Minister has reasonable grounds to believe that the applicant has submitted false or misleading information in support of their application.

Renewal of permit

6 (1) A permit may be renewed once.

Application for renewal

(2) An application for the renewal of a permit must include the information specified in the schedule and be submitted to the Minister not later than the 90th day before the day on which the permit expires.

Certification

(3) The application must be accompanied by a certification, dated and signed by the applicant or by their authorized representative, stating that the information contained in the application is accurate and complete.

Conditions of renewal

(4) The Minister may renew the permit for a term that must not exceed 24 months if the conditions in subsection 5(1) are met.

Refusal

(5) The Minister must refuse to renew the permit if the Minister has reasonable grounds to believe that the applicant has submitted false or misleading information in support of their application.

Revocation of permit

7 (1) The Minister must revoke a permit if the Minister has reasonable grounds to believe that the permit holder has submitted false or misleading information to the Minister or that the permit holder has failed to comply with the permit.

Conditions for revocation

(2) The Minister must not revoke a permit unless the Minister has

Date of revocation

(3) The revocation of a permit is not effective until the 20th day after the day on which the Minister notifies the permit holder.

Documents and Records

Electronic submission

8 (1) Any document submitted to the Minister under these Regulations must be submitted electronically in the form specified by the Minister and must be accompanied by a certification, dated and signed by the person submitting the document or by their authorized representative, stating that the document is accurate and complete.

Submission on paper

(2) If the Minister has not specified an electronic form or if it is not feasible to submit the document electronically in accordance with subsection (1) because of circumstances beyond the person’s control, the document must be submitted on paper in the form specified by the Minister and must be accompanied by a certification, dated and signed by the person submitting the document or by their authorized representative, stating that the document is accurate and complete. If no form has been specified, the information may be sent in any form.

Submission of information

9 A person that manufactures or imports wheel weights in respect of which these Regulations apply must submit to the Minister, in English or French, any requested information that relates to the lead in those wheel weights.

Records

10 (1) Any person that manufactures or imports wheel weights in respect of which these Regulations apply must maintain records that demonstrate that those wheel weights were manufactured or imported in accordance with these Regulations and that include

Retaining records

(2) The records must be retained for a period of at least five years after the day on which they are made.

Place retained

(3) The records must be retained at the person’s principal place of business in Canada or, on notification to the Minister, at any other location in Canada where the records can be inspected.

Records moved

(4) If the records are moved, the person must notify the Minister in writing of the civic address in Canada of the new location within 30 days after the day of the move.

Electronic record

(5) A person that keeps records electronically must ensure that all equipment and software necessary to make the record intelligible are available during the retention period.

Accredited Laboratory

Accredited laboratory

11 Any analysis performed to determine the concentration of lead for the purposes of these Regulations must be performed by a laboratory that meets the following conditions at the time of the analysis:

Related Amendment to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999)

12 The schedule to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999) footnote 1 is amended by adding the following in numerical order:

Item

Column 1

Regulations

Column 2

Provisions

37

Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations

(a) subsection 3(1)

Coming into Force

First anniversary of registration

13 These Regulations come into force on the first anniversary of the day on which they are registered.

SCHEDULE

(Subsections 4(1) and 6(2))

Information to be Contained in an Application for a Permit or Renewal of a Permit

1 Information respecting the applicant:

2 Information respecting the product:

3 Information establishing that, at the time of the application, there is no alternative to the manufacture or importation of wheel weights containing lead or, if there is an alternative, that it is not technically or economically feasible for the applicant.

4 The requested term of the permit.

5 The civic and postal addresses of the location where the records referred to in section 10 of these Regulations are retained in Canada.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Lead has been the most common material used for wheel balancing in the Canadian wheel weight market. Lead wheel weights are lost on roads and highways every year, and generate lead dust. This dust can build up in soil, enter waterways through runoff, or be inhaled. These pathways of exposure to lead dust can give rise to adverse human health and environmental impacts. Since it is a non-biodegradable metal, lead can also accumulate in the environment, contaminate water, and poison wildlife. Without action, it is expected that lead wheel weights may continue to be manufactured in or imported into Canada, resulting in continued risks to human health and ecosystems from exposure to elevated concentrations of lead in the environment.

Background

Lead is listed in Schedule 1 (the List of Toxic Substances) to the Canadian Environmental Protection Act, 1999 (CEPA). CEPA provides the Minister of the Environment (the Minister) and the Minister of Health with the authority to control the importation, manufacture, and use of lead and lead compounds in Canada. Lead is subject to numerous federal risk management initiatives in Canada that target drinking water, food, natural health and therapeutic products, cosmetics, tobacco, and other consumer products. Regulations taken under CEPA prohibit the addition of lead in gasoline and control its release from steel manufacturing, and mining effluents.

Lead is an odourless metal that is malleable, ductile, and resistant to chemical corrosion. It is a naturally occurring substance found at low levels in bedrock, soil, sediment, surface water, groundwater, and seawater. Lead also occurs naturally at low levels in food through uptake of soil by plants and the subsequent consumption of plants by animals, and through uptake of water and sediments by fish. Its dispersal in the environment is mainly due to human activities, including the use and disposal of products; in particular, lead ammunition, sinkers and jigs for fishing, and wheel weights.

Lead has historically been the preferred metal used for wheel balancing on vehicles because of its physical and chemical properties. Wheel weights are installed on the wheels of vehicles to correct uneven weight distribution in wheel and tire assembly in order to prevent tire and suspension assembly wear, and to help stabilize vehicles at high speeds.

Lead exposure and blood lead levels in Canada

Since the late 1970s, Canadian blood lead levels have declined by more than 70%. This decline is mainly attributed to the successful phase-out of lead in gasoline, paint and surface coatings, and the elimination of lead alloys used for soldering food cans. However, although blood-lead levels have continued to decline, lead is still widely detected in the Canadian population.footnote 2

In 1994, the Federal-Provincial Committee on Environmental and Occupational Health recommended a blood-lead level of 10 micrograms per decilitre (µg/dL) as guidance for a lead exposure threshold. Since the establishment of this blood-lead threshold, scientific evidence has been published that demonstrates the critical health effects that can occur below a blood-lead level of 10 μg/dL. Health effects are well documented at blood lead levels as low as 1–2 µg/dL. The risks associated with exposure to lead include developmental neurotoxicity, and neurodegenerative, cardiovascular, renal and reproductive effects.

Objective

The objective of the Prohibition of the Manufacture and Importation of Wheel Weights Containing Lead Regulations (the Regulations) is to reduce human and environmental exposure to lead by prohibiting the manufacture and import of lead wheel weights destined for the Canadian market, which would help reduce the risk of adverse health impacts resulting from lead exposure, and help improve air, water and soil quality.

Description

The Regulations are made under section 93 of CEPA and come into force 12 months after the day on which they are registered. They prohibit the manufacture and import of wheel weights that contain more than 0.1% lead by weight. This prohibition does not apply in respect of the manufacture for export of wheel weights, or the importation of wheel weights installed on vehicles. The Regulations do not apply to the sale or offer for sale of wheel weights, nor to their transit through Canada, regardless of their lead content.

The Regulations provide compliance flexibility to regulated parties in the form of a permitting regime. However, since alternatives are readily available, permit applications are not anticipated. In exceptional circumstances, the Minister may issue a permit to a manufacturer or importer of wheel weights to allow a specific use or situation in Canada. The permit applicant will be required to demonstrate that, at the time of the application, there are no alternatives to manufacturing or importing wheel weights containing lead, or the alternatives are not technically or economically feasible for the applicant. The term of the permit must not exceed 24 months, and the Minister may renew the permit once for a term that must not exceed 24 months.

Regulatory development

Consultation

The Department of the Environment (the Department) consulted stakeholders from 2014 to 2017 on the development of the Regulations. These stakeholders included industry members operating in Canada (i.e. a manufacturer, importers and distributors; downstream users; independently owned repair shops, car dealers and tire dealers; and secondary lead smelters, scrap yards, recyclers, and scrap metal brokers), environmental non-governmental organizations, and non-profit organizations. Indigenous peoples were informed of the proposed Regulations and were invited to the consultation sessions.

In response to stakeholder comments, the Department designed the Regulations in a manner that does not prohibit the manufacture for export of wheel weights containing more than 0.1% of lead by weight, and that does not affect the transit of wheel weights through Canada. The Department also tailored compliance promotion and developed communication material to help businesses understand the impact on the supply of lead wheel weights under the Regulations. As well, the Department worked with industry members to communicate the implications of the prohibition, including the transition to alternative wheel weights, and how it will be enforced without expecting changes with respect to the management of existing wheel weight inventories.

Feedback received during the 70-day public comment period following publication in the Canada Gazette, Part I

Following the prepublication of the proposed regulatory text in the summer of 2021, several auto part importers inquired about the tentative timeline of when the Regulations would come into force and whether shops, dealers and garages would be allowed to use any remaining stock of lead wheel weights after the coming into force of the Regulations.

Response: The Regulations will come into force 12 months after the day on which they are registered and information will be provided on the Department’s website prior to that date (see Implementation section). The sale and installation of remaining stock of lead wheel weights already in Canada will be allowed after the Regulations come into force.

One individual registered their opinion that the Regulations are unnecessary, and a waste of taxpayer resources that could be better spent elsewhere.

Response: The Regulations are based on a scientific risk assessment of the potential effects of lead on the environment and health of Canadians, are in line with international regulatory standards, and do not require any additional government expenditures.

Modern treaty obligations and Indigenous engagement and consultation

The Regulations are not expected to impact directly, or indirectly, the rights of Indigenous peoples, and the Regulations respect the federal government’s obligations in relation to rights protected by section 35 of the Constitution Act, 1982, modern treaties, and international human rights obligations.

Instrument choice

When determining how to address the issues identified above and considering that stakeholders were not in favour of voluntary instruments during the 2014 consultations, two options were considered: (1) maintaining the status quo; and (2) making the Regulations. The status quo option was not chosen, as lead wheel weights would continue to enter the Canadian wheel weight market, resulting in continued risks to human health and ecosystems from exposure to lead in the environment. In addition, the Regulations will ensure a level playing field in the Canadian market for wheel weights and enhance alignment with existing risk management actions in other jurisdictions around the world. For these reasons, the Regulations have been chosen to enable the achievement of the risk management objectives.

Regulatory analysis

Benefits and costs

The Regulations prohibit the manufacture and import of wheel weights that contain more than 0.1% lead by weight. By preventing new wheel weights containing lead from entering the Canadian market, the Regulations will gradually eliminate lead wheel weight stocks.

It is projected that the Regulations could eliminate lead wheel weights lost on Canadian roads and highways by 2025. Regulated parties can choose to import or manufacture any lead-free alternatives, with the exception of wheel weights that have a mercury concentration of more than 0.1% by weight, the import and manufacture of which are prohibited by Canada’s Products Containing Mercury Regulations.

Alternatives

Steel and zinc are two alternatives to lead that are currently being used for wheel weights. According to consultations with auto sector experts, newly manufactured or imported vehicles normally have alternative wheel weights on them at the manufacturing site. These alternatives are often replaced with lead wheel weights by automotive aftermarket garages and repair shops during seasonal tire changes. A draft Chemicals Management Plan (CMP) risk assessment, however, identified ecological concerns with zinc in mining effluent and in effluent from pulp and paper mills, so the appropriateness of zinc wheel weights is still being investigated by the Department. A survey conducted for the Department in 2011 found that lead wheel weights accounted for 72% of the Canadian market, and that 28% of wheel weights used in Canada were made from an alternative material. Steel is the main alternative used in North America, followed by zinc, which is also used in Europe. Steel is expected to be the primary replacement over other alternatives. The wheel weight manufacturer in Canada is expected to replace its lead wheel weight production by steel and zinc wheel weight production. The need to retool is not anticipated, as the manufacturer is anticipating the change, and lead-free alternatives (steel and zinc) are already widely in use. It is worth noting that the proposed conclusion in the draft CMP risk assessment is that zinc and its compounds may have immediate or long-term harmful effects on the environment or its biological diversity, especially aquatic organisms.footnote 3

Expected quantity of lead in wheel weights and the estimated costs of alternatives

The cost of wheel weights depends on raw material and production costs, which vary according to the style of clip-on or adhesive weight, the installation of the wheel weight on the tires, and the actual weight of the wheel weight. Steel and zinc wheel weights have tended to be more expensive than lead wheel weights for most applications. Steel is expected to be the primary replacement over other alternatives. It is currently the second most popular material after lead — zinc being the third. The single manufacturer in Canada is expected to replace its lead wheel weight production by steel and zinc wheel weight production.

In 2013, a study was completed for the Department to estimate the amount of lead in wheel weights in Canada.footnote 4 The study found that, in 2011, lead wheel weights accounted for about 72% of the Canadian light-duty vehicle (passenger cars, sport utility vehicles and light truck vehicles) wheel weight market, which was about 95% of the overall Canadian wheel weight market. The study also estimated the market share for the heavy-duty vehicle (e.g. buses, trucks and trailers) and motorcycle wheel weight markets. The study calculated the amount of lead based on the typical weight of wheel weights for each market segment, and the number of weights per vehicle, as shown in Table 1 below. Overall, it was estimated that wheel weights contained 3 674 tonnes of lead in 2011.

Table 1: Total amount of lead in wheel weights (WW) used in the Canadian vehicle fleet in 2011

Type of vehicles

Light duty

Heavy duty

Motorcycles

Total

Number of vehicles

20 356 900

523 847

631 093

21 511 840

Lead WW market share

72%

76%

86%

n/a

Vehicles using lead WW

14 656 968

398 123

542 740

15 597 832

Number of tires with WW on each vehicle

4

2

2

n/a

Total number of tires using lead WW

58 627 872

796 247

1 085 481

60 509 600

Weight of typical WW (g)

56.7

400

28.35

n/a

Total weight of lead WW (tonnes)

3 324

319

31

3 674

As the vehicle fleet grows every year, there could be a corresponding growth in the number of lead wheel weights since 2011. However, industry feedback suggests that the market share for lead wheel weights has been declining, particularly as new vehicles now use alternatives. The analysis assumes that these trends offset one another, and that wheel weights are replaced annually, and that stocks of existing lead wheel weights are depleted in the year the Regulations are registered. These assumptions are assessed in a sensitivity analysis.

The costs of wheel weights can vary over time. In 2018, the price of a typical two-ounce lead wheel weight was as much as $0.90 US. In July 2022, the same sourcefootnote 5 priced these wheel weights at $0.70 US. The costs of using non-lead replacements have also varied over time. The incremental prices for steel alternatives have varied from 6% more in 2018 to less than the price of lead wheel weights in July 2022. Over the same period, zinc wheel weights have increased in price from 6% to 30% more than similar lead wheel weights. Given these price fluctuations, the analysis maintains the 2018 price estimates (in 2019 Canadian dollars) and assesses alternate incremental prices in a sensitivity analysis. The analysis took the cost per gram of the most common type of lead wheel weight (two ounce size) and converted this to a cost-per-tonne estimate. The cost per tonne of lead wheel weights was thus estimated to be about $21,000, and the cost difference to replace one tonne of lead wheel weights was estimated to be $1,260 more per tonne of wheel weights, which would represent a 6% increase in the costs of alternatives.

The analysis assumes that lead wheel weights will be completely phased out 12 months after the coming into force of the Regulations, and that lead-free products will become the only type of wheel weights manufactured, imported and distributed in the Canadian market. It also assumes that 12 months is enough time for the current stock of lead wheel weights to be used. As the Regulations were expected to be registered by January 1, 2023, the first (“present”) year of the analysis is 2023. Finally, the analysis assumes that regulated parties will pass on the incremental costs of alternatives to their customers, which include independently owned repair shops, car dealers and tire dealers, who will in turn pass them onto vehicle owners.

The Department will assume incremental costs related to training, inspections, investigations, measures to deal with any alleged violations, and compliance promotion activities. One-time upfront costs will represent $100,000 for enforcement, which will be for strategic intelligence assessment work, enforcement strategy development, and the training of enforcement officers. Annual government costs are estimated to be about $31,500 for administration, coordination and analysis to support enforcement activities; inspections and measures to deal with alleged violations; investigations; and prosecutions. These annual costs also include compliance promotion activities undertaken to increase awareness about, understanding of and compliance with the Regulations, which will annually represent about $6,000. The total estimated enforcement and compliance promotion costs are projected to be about $305,000 from 2023 to 2032, using a 7% annual discount rate. In annualized terms, the government costs will be $46,849 over the timeframe of the analysis.

Overall, the present value costs of the Regulations (listed in Table 2) are projected to be about $30 million in 2019 dollars, from 2023 to 2032, using a 7% annual discount rate.

Table 2: Summary of costs

Number of years: 10 (2023–2032)
Dollar year of costing: 2019
Present value year: 2023
Discount rate: 7%

Description of costs / year

Undiscounted 2023

Undiscounted 2024

Undiscounted 2032

Discounted
2023 to 2032

Annualized
2023 to 2032

Industry

$0

$4,630,500

$4,630,500

$30,168,783

$4,295,356

Government

$100,000

$31,500

$31,500

$305,230

$46,849

Total

$100,000

$4,662,000

$4,662,000

$30,474,013

$4,338,814
Expected benefits

Canadians are exposed to low levels of lead through various sources, including food, drinking water, air, dust, soil, and lead-containing products. The main source of exposure for the general adult population is ingestion of food and drinking water. For infants and children, the primary sources of exposure are food, drinking water, and the ingestion of non-food items containing lead, such as house dust, paint, soil, and consumer products.

Approximately 3% to 10% of ingested lead is absorbed into the bloodstream of adults, whereas the amount absorbed into the bloodstream of children can be as high as 40% to 50%. The half-life of lead in blood is approximately 30 days, whereas the half-life of lead accumulated in the body, such as in bone, can be in the range of 10 to 30 years.

The Regulations will reduce the presence of lead in the environment and reduce risks to the health of Canadians through the prohibition of the manufacture and importation of lead wheel weights. Health risks from exposure to lead are well established and even small amounts can be hazardous to human health. Once absorbed by the human body, lead circulates in the bloodstream, where it accumulates in tissues, and particularly in bone. Some lead may also be sequestered in soft tissues, such as the liver, kidneys, and lungs. Bones account for approximately 70% of the total body burden of lead in children and more than 90% of the total body burden in adults.footnote 6 Lead that accumulates in bone can be remobilized and released back into circulating blood.

Although blood lead concentrations in Canadians are below the current Canadian guidance value of 10 µg/dL set by Canadafootnote 7 (and currently under review), adverse effects have been observed at levels lower than this one.footnote 8 Regardless of the significant decline in Canadian blood lead levels over the past several decades, health effects have been well documented at blood lead levels as low as 1–2 µg/dL. Although there is uncertainty associated with the effects observed at these levels, this analysis considers it appropriate to apply a precautionary approach when characterizing risks posed by lead exposure.

It is anticipated that the reduction of lead dust resulting from the Regulations will generate health benefits including reduced blood lead levels, which would reduce neurotoxicity, and neurodegenerative, cardiovascular, renal and reproductive effects associated with exposure to lead. Other health benefits include improved academic achievements, social behaviours, attention and executive functions, as well as auditory and visual functions. These health benefits are expected to manifest themselves predominantly in urban areas with high traffic flow volumes.

The environmental risks posed by lead exposure can be hazardous for ecosystems and wildlife. The Regulations could help reduce these risks by limiting the amount of lead released from wheel weights that contaminates air, water and soil.footnote 2

There is a high level of uncertainty associated with the fate of wheel weights containing lead that are not sent to smelters for recycling. Lead exposure can occur once lead wheel weights are removed by dismantlers or aftermarket facilities (e.g. by tire dealers or during vehicle repairs), and given to hobbyists to make fishing weights, counter-weights, or other lead-based products. These activities commonly contribute to indoor air exposure to lead dust. Discarded fishing sinkers and jigs made from lead wheel weights can be mistaken for small pebbles and ingested by wildlife, such as loons and other waterbirds, and contribute to lead poisoning and possibly death. The Regulations will decrease the likelihood of secondary lead exposure, thus helping to improve air quality and lowering the risks to ecosystems and wildlife.

Based on a study commissioned by the Department in 2014, it is estimated that about 110 tonnes of lead wheel weights routinely fall off vehicles every year in Canada (i.e. a 3% fall off rate). These wheel weights eventually erode into lead dust that is then dispersed into the environment. In this specific circumstance, it is difficult to correlate lead exposure specifically from lead wheel weights to various health and societal outcomes for individuals. Health and societal impacts could take many years to occur, if not decades. Therefore, the benefits associated with the Regulations are presented in qualitative terms, as the parameters of interest have yet to be studied and quantified in a manner that is suitable for cost-benefit analysis. For example, current lead dust concentrations in soil, waterways and ambient air from wheel weight abrasion have not been studied extensively, nor have the levels of exposure to lead from these pathways for Canadians.

Sensitivity analysis and distributional analysis

There is uncertainty about the amount of lead wheel weights expected to be in use in the absence of these Regulations. While the vehicle fleet is now larger than it was in 2011, industry feedback suggests that the market share for lead wheel weights has been declining, particularly as new vehicles now use alternatives. The analysis assumes that these trends offset one another in the central case, and considers two alternate scenarios here: a high-end estimate where the market share for lead wheel weights has not decreased very much and a low-end scenario where it has fallen much more substantially than the central case.

If the total amount of lead is higher (or lower) than estimated, then the quantified benefits and monetized industry costs would be proportionately higher (or lower). The Department considers that a reasonable range to capture the uncertainty of the estimated annual amount of lead could be 50% higher (about 5 500 tonnes) or lower (about 1 800 tonnes) than estimated (3 674 tonnes per year) and thus the range of estimated industry costs could also be 50% higher (or lower) than estimated ($4,630,500 per year after 2023).

There is also uncertainty about the incremental price of alternative wheel weights, as prices can fluctuate. The Department considers that a reasonable range to capture the uncertainty of incremental prices would be 50% higher (or lower) than the estimate for the central case, which would proportionally increase (or decrease) the estimated industry compliance costs.

The Department notes that the incremental costs for alternate wheel weights are unlikely to be noticeable to consumers, given the overall cost to rebalance tires. For this reason, the Department expects that the industry will pass on most or all of these incremental costs to vehicle owners. Thus no competitiveness impacts are expected.

Small business lens

One manufacturer and 10 importers would be impacted by the Regulations. Of these regulated parties, the 10 importers are small businesses. This estimate is based on available employee count data and assumes that a small business is any business that has fewer than 100 employees. The Regulations are expected to impose compliance costs for small businesses; therefore, the small business lens applies to these Regulations. The Regulations are not expected to increase administrative costs, as usual record keeping is sufficient. The only administrative costs being introduced through the Regulations will be in the case of permit applications. However, no permit applications are anticipated. In addition, the 12-month transition period before the coming into force will allow for current stock to be used and contribute to limiting the burden on businesses.

The Regulations will not provide specific flexibilities to small businesses, such as exceptions. Exceptions for small businesses with respect to prohibiting lead wheel weights would allow small businesses to import lead wheel weights containing more than 0.1% lead by weight. Such a scenario would reduce the benefits to Canadians associated with reductions in exposure to lead releases from wheel weights. Moreover, exceptions for small businesses would create a non-level playing field for manufacturers and importers operating in Canada.

Consultations were held with current and potential regulated parties prior to the publication of the Regulations in the Canada Gazette, Part II. Stakeholders, including small businesses, were generally supportive of the Regulations.

Table 3 below shows the expected costs to businesses resulting from the implementation of the Regulations. In total, it is estimated that businesses would incur costs of about $30 million over 10 years, or 6% more for each business’s costs of alternate wheel weights. These costs would be expected to be passed through by importers (small businesses) to customers as they mark up their importing costs to be profitable. Their customers (including independently owned repair shops, car dealers and tire dealers) would in turn be expected to pass along the costs to vehicle owners when tires are rebalanced. The total costs carried by small businesses are expected to be about $30 million, because the Department has included the manufacturer of lead wheel weights operating in Canada in the calculation of the anticipated costs, as removing this large business from the calculations could indirectly reveal confidential business information. The expected cost values presented in Table 3 are calculated using an analytical period of 2023 to 2032, in 2019 dollars, and a 7% annual discount rate.

Table 3: Summary of small business lens analysis

Number of businesses: 11
Number of years: 10 (2023 to 2032)
Dollar year of costing: 2019
Present value year: 2023
Discount rate: 7%

Expected costs

Annualized value

Present value

Compliance costs (cost of switching to lead-free wheel weights)

$4,630,500

$30,169,000

Administrative costs

$0

$0

Total costs (all businesses)

$4,630,500

$30,169,000

Cost per impacted small business

$390,000

$2,743,000

One-for-one rule

The Regulations are not expected to introduce new administrative costs for regulated parties unless they choose to apply for a permit. However, the Department does not expect to receive permit applications. Permits could be granted in the case of unforeseen circumstances where lead wheel weights might still need to be used for specific conditions. Permit applicants would be required to demonstrate that, at the time of applying, there are no alternatives to manufacturing or importing wheel weights containing lead, or that the alternatives are not technically or economically feasible for them. The Minister may issue a permit that would allow a regulated party to manufacture or import wheel weights containing lead for usage on vehicles in Canada. The term of the permit must not exceed 24 months. A regulated party may apply for a permit renewal, and the Minister may renew it once for a term that must not exceed 24 months, if the conditions underlying the Minister’s approval of the original permit are still satisfied.

Regulatory cooperation and alignment

Many governments around the world have implemented various regulatory initiatives, both domestically and through international collaboration, to reduce human and ecological exposure to lead. Since the manufacturing of automotive parts is a globally integrated market, the Regulations are aligned, where possible, with the prohibitions of lead wheel weights on vehicles in certain U.S. states (California, Illinois, Maine, Maryland, Minnesota, New Jersey, New York, Vermont and Washington), the European Union and Japan. These Regulations will allow manufacturers and importers in Canada to transition more rapidly towards a lead-free market for wheel weights and prevent Canada from becoming a dumping ground for lead wheel weights that are no longer able to be sold in other jurisdictions where restrictions are already in place.

Strategic environmental assessment

The Regulations were developed under Canada’s Chemicals Management Plan, a Government of Canada initiative aimed at reducing the risks posed by chemicals to Canadians and their environment. A strategic environmental assessment was completed in 2011 and concluded that regulatory policies developed under the Chemicals Management Plan are expected to reduce the risks posed by toxic substances. This anticipated outcome is in line with the “Safe and Healthy Communities” goal of the 2019–2022 strategy, Achieving a Sustainable Future: A Federal Sustainable Development Strategy for Canada (PDF).

Gender-based analysis plus (GBA+)

The Regulations are not expected to result in direct and disproportionate impacts on individuals based on identity factors such as race, ethnicity, religion, age, income and mental or physical disability. Since the amount of lead that enters the environment is anticipated to decrease, the Regulations could possibly lead to indirect and disproportionate impacts (benefits) based on sex, age, gender and geography. In the Sixth Report on Human Biomonitoring of Environmental Chemicals in Canada, Health Canada indicates that in 2018–2019, blood lead levels were significantly higher in males aged 3 to 79 (0.87 µg/dL) compared with females (0.75 µg/dL), and in adults aged 20 to 39 (0.71 µg/dL), 40 to 59 (0.92 µg/dL), and 60 to 79 (1.4 µg/dL), compared with children and youth aged 3 to 5 (0.50 µg/dL), 6 to 11 (0.49 µg/dL), and 12 to 19 (0.47 µg/dL). Even though blood lead levels were, on average, lower in infants and children, there is a particular concern for them because they have greater gastrointestinal absorption and less effective renal excretion than adults, in addition to different behavioural patterns (e.g. putting objects into their mouths, crawling, and greater frequency of hand-to-mouth contact).

A number of biomonitoring studies measuring blood lead levels have been conducted in various locations in Canada over the years. While blood lead levels varied across age groups within the Canadian population, the highest concentrations were reported in communities with point sources of environmental lead pollution, such as pollution from smelting activities, and in Northern communities.footnote 9

Implementation, compliance and enforcement, and service standards

The Regulations come into force 12 months after the day on which they are registered. The Department’s website details the precise coming-into-force date along with other information, fact sheets and frequently asked questions on the Regulations.

The Department’s approach to compliance promotion activities will include maintaining a presence on the Department’s website; responding to inquiries from stakeholders; and helping to ensure that aftermarket businesses understand the impact of the Regulations on the supply of lead wheel weights.

As the Regulations are made under CEPA, implementation and enforcement will be undertaken by the Department in accordance with the Canadian Environmental Protection Act: compliance and enforcement policy (the Policy). Enforcement officers will apply the Policy when verifying compliance with the regulatory requirements. The Policy sets out the range of possible responses to alleged violations, including warnings, directions, environmental protection compliance orders, administrative monetary penalties, ticketing, ministerial orders, injunctions, prosecution, and environmental protection alternative measures, which are an alternative to a court trial after the laying of charges for a violation under CEPA. In addition, the Policy explains when the Department will resort to civil suits by the Crown for cost recovery. Following an inspection or investigation, when an enforcement officer discovers an alleged violation, the officer will choose the appropriate enforcement action based on the Policy.

The Regulations make consequential amendments to the Regulations Designating Regulatory Provisions for Purposes of Enforcement (Canadian Environmental Protection Act, 1999) [the Designation Regulations]. The Designation Regulations identify provisions of various regulations made under CEPA as being subject to an enhanced fine range. These provisions are identified on the basis that violating them involves direct harm or risk of harm to the environment, or obstruction of authority. Designated sections of the Regulations are added to the schedule of the Designation Regulations to reflect the specific provisions designated.

Contacts

Matt Lebrun
Director
Products Division
Industrial Sectors and Chemicals Directorate
Environmental Protection Branch
Department of the Environment
351 Saint-Joseph Boulevard, 9th Floor
Gatineau, Quebec
K1A 0H3
Email: Produits-Products@ec.gc.ca

Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Strategic Policy Branch
Department of the Environment
200 Sacré-Cœur Boulevard, 10th Floor
Gatineau, Quebec
K1A 0H3
Email: ravd.darv@ec.gc.ca