Coalition of Canadian Plastic Industry Members Launch Legal Challenge to Designation of Plastic Manufactured Items as Toxic under CEPA

By an Order Adding a Toxic Substance to Schedule 1 to the Canadian Environmental Protection Act, 1999 published in the Canada Gazette on May 12, 2021 (the Order), the federal government added “plastic manufactured items” to the list of toxic substances under Schedule 1 of the Canadian Environmental Protection Act, 1999 (CEPA). This decision follows an announcement in October 2020 by Environment and Climate Change Canada (ECCC) of its regulatory intent to add “plastic manufactured items” to Schedule 1. The change was introduced as part of the government’s commitment to achieve zero-plastic waste by 2030 under the Ocean Plastics Charter.

As discussed in further detail below, a group of plastic manufacturers is now challenging the federal government in court following the government’s designation of manufactured plastic items as a “toxic substance” under CEPA. On May 18, 2021, the Responsible Plastic Use Coalition (RPUC or Coalition) filed a notice of application with the Federal Court alleging that the designation is unconstitutional and scientifically inaccurate.

There is no doubt that plastics provide unparalleled functionality and durability across a range of products in our everyday lives. Given the prevalence of plastics throughout our economy, the designation of plastic manufactured items as toxic under CEPA will have potential implications across the supply chain. In particular, the designation gives the federal government greater powers to regulate various aspects of the life cycle of plastic products, with potentially significant penalties for noncompliance with CEPA provisions.

Proposed Regulatory Approach to Managing Plastic Products

The federal government’s October 2020 consultation paper, Proposed Integrated Management Approach to Plastic Products to Prevent Waste and Pollution, provides the basis for the development of an integrated management approach to plastics, including proposed actions across the value chain to achieve zero plastic waste (including a ban on plastic checkout bags, straws, stir sticks, six-pack rings, cutlery, and food ware made from hard-to-recycle plastics), as well as systemic improvements to recover and recycle plastic. The public consultation period for the paper ended on December 9, 2020 and regulations are expected to be finalized by the end of 2021.

The federal government has indicated that these proposed measures will align with similar actions being taken in the European Union and other countries. In addition, these initiatives complement Canada’s adoption of the Ocean Plastics Charter in June 2018, which lays the groundwork for ensuring that plastics are designed for reuse and recycling. The Charter establishes targets to improve management of plastics, including:

  • working with industry towards 100% reusable, recyclable, or, where viable alternatives do not exist, recoverable, plastics by 2030;
  • working with industry towards increasing recycled content by at least 50% in plastic products where applicable by 2030;
  • working with industry and other levels of government, to reuse and/or recycle at least 55% of plastic packaging by 2030 and recover 100% of all plastics by 2040; and
  • working with industry towards reducing the use of microbeads in personal care products, and addressing other sources of microplastics.

In addition, the federal government’s efforts to reduce plastic pollution includes ongoing work through the CCME to develop an action plan to implement the Canada-wide 2018 Strategy on Zero Plastic Waste, which articulates a vision for a circular economy for plastics, and a two-phase action plan (more information available here: Phase 1 and Phase 2) that is being jointly implemented.

The Addition of Plastic Manufactured Items to Schedule 1

The addition of “plastic manufactured items” to the list of toxic substances under Schedule 1 of CEPA forms part of the federal government’s strategy to achieve zero-plastic waste by 2030. Following the October 2020 announcement of the federal government’s intent to add plastic manufactured items to Schedule 1, at least 60 notices of objection were submitted by industry in relation to the proposed order. ECCC has published a summary table of public comments received on the proposed order.

Under section 64 of CEPA, toxic substances are generally defined as substances that (i) have, or may have, a harmful effect on the environment or constitute, or (ii) may constitute, a danger to the environment or human health. Section 90(1) of CEPA enables Ottawa to regulate substances it deems to be “toxic” by adding them to the Schedule 1 List of Toxic Substances. The Order defines “plastic manufactured items” as “any items made of plastic formed into a specific physical shape or design during manufacture, and have, for their intended use, a function or functions dependent in whole or in part on their shape or design.” They can include final products, as well as components of products. This new addition is wider in scope than substances currently listed under Schedule 1, such as asbestos and lead.

With the Schedule 1 designation, Ottawa can manage the production and sale of items containing plastic, such as water bottles and phone parts. The government may regulate the quantity of plastic items produced in Canada, and how these products are to be processed, exported, stored, transported, and packaged. Although the designation does not impose new costs or requirements on manufacturers, the federal government’s Regulatory Impact Analysis Statement indicates that future measures made as a result of the designation may result in “incremental costs.”

According to the government’s Science Assessment of Plastic Pollution, 1% all of plastic waste enters the Canadian environment as pollution. In 2016, this amounted to 29,000 tonnes of plastic pollution. According to the Regulatory Impact Analysis Statement, the CEPA designation is intended to “manage the potential ecological risks associated with those [plastic manufactured] items becoming plastic pollution.”

Unreasonable and Unconstitutional?

Six days after the designation, a group of 27 plastic manufacturers, recyclers, and distributers filed a notice of application with the Federal Court. The Coalition bases their application for judicial review of the Order on three grounds:

  • Unconstitutional: The Coalition argues that the designation is contrary to federal criminal power, as “plastic manufactured items” is an “impermissibly broad term” that lacks the precision necessary for criminal prohibitions.[1] The overbroad Order, they claim, “captures thousands of products essential to modern living, from medical equipment to food packaging…”.[2] Additionally, the Coalition contends that the designation intrudes on provincial jurisdiction over waste management under Section 92 of the Constitution.[3]
  • Unrelated: The applicants claim that the category of “plastic manufactured items” fails to meet CEPA’s definitions of “substance” and “toxic.” The statutory definition of “substance” is limited to singular items, they assert, rather than a broad descriptive category. Moreover, the Coalition asserts, beyond ingesting or being entangled in plastic products, plastic items pose insufficient risks to the environment.[4] As stated, “litter can be problematic, but does not satisfy the threshold of ‘toxicity’.”[5]
  • Unreasonable: Finally, the Coalition asserts that the designation is based on conjecture, not evidence. For example, they claim that there is limited data to establish that 1% of all plastic waste becomes pollution.[6]

At the time of writing, the federal government has not filed a response to the notice.

Federal Jurisdiction Over Plastic Waste?

Plastic products and waste are subject to a patchwork of federal and provincial regulation. Under CEPA, Ottawa maintains the authority to regulate certain plastic products, and prohibit those substances its deems “toxic”.[7] In 2017, for example, the federal government banned the manufacture and sale of all toiletries that contain plastic microbeads.

The Order enables federal regulation of the entire life cycle of plastic products, from production to disposal. The designation therefore marks a potential foray into the provincial jurisdiction of waste management.

As stated in the RPUC notice, the federal government may claim jurisdiction over plastic waste under federal criminal powers. In R v. Hydro-Quebec, a narrow majority of the Supreme Court of Canada (SCC) upheld Parliament’s authority to regulate toxic substances under the criminal head. The SCC noted the importance of avoiding broad prohibitions when exercising this power and carefully targeting specific substances.[8] RPUC contends that the May 12 designation does not meet this standard of specificity.

Alternatively, one could argue that plastic pollution can be characterized as a “matter of national concern” that warrants federal jurisdiction. Last March, the SCC validated the federal government’s authority to regulate greenhouse gas (GHG) emissions under the “national concern branch” of the “peace, order, and good government” power.

Is the Designation Reasonable & Scientific?

The federal government has wide discretion in defining what constitutes a “toxic substance” under CEPA.[9] The SCC in R v. Hydro Quebec added certain limitations to this license. They held that the Act may only apply to a “restricted number of substances.”[10] Additionally, ”toxic” is to be defined “in the ordinary sense” and items must be comparable to substances currently listed under Schedule 1.[11]

Contrary to past designations, ECCC appears to define “plastic manufactured items” as products that are capable of being toxic, rather than substances that are inherently toxic. Products that are commonly considered harmless, such as a recently purchased toy, are designated “toxic” as they have the potential to be plastic pollution.

As stated in the Coalition’s notice, the government does not provide a scientific explanation as to why all plastic items are environmentally harmful. Rather than “quantify the risks of plastic pollution on the environment,” the federal government’s scientific assessment of plastic pollution seeks to “guide future scientific and regulatory activities.”[12] Further, the Order does not explain why all “plastic manufactured items,” regardless of their condition or risk, must be regulated.

Looking Ahead to a Zero-Plastic Waste Future

The designation of manufactured plastic items as toxic is the federal government’s proclaimed “first step” towards a zero-plastic waste future. Further regulatory changes to Canada’s $35 billion plastic industry are likely. The RPUC litigation highlights significant questions regarding jurisdiction, scope of legislation, and scientific standards that will continue to shape the transition to a more circular economy for plastics.

McCarthy Tétrault is here to assist you in navigating the next steps. If you have any questions about how the government’s plastics designation may impact your business, or about managing environment and climate-related risks more generally, we would be happy help you adapt and thrive in this rapidly evolving regulatory framework.

Please contact Selina Lee-Andersen, Joanna Rosengarten, or Will Horne to learn more.

[1] Responsible Plastic Use Coalition v. The Minister of the Environment and Climate Change, Notice of Application, T-824-21-ID 1, at para 44.

[2] Ibid, at para 47.

[3] Ibid, at paras 38-39.

[4] Ibid, at paras 74-75, 78.

[5] Ibid, at para 70.

[6] Ibid, at para 113.

[7] R v. Hydro Quebec, [1997] 3 S.C.R. 213 (“Hydro Quebec”), at para 147.

[8] Ibid.

[9] Castrilli, Joseph and Fe de Leon, “Blog: Control of Toxic Substances at the Crossroads in Canada” (17 July 2018) (https://cela.ca/control-of-toxic-substances-at-the-crossroads-in-canada/).

[10] Hydro Quebec, at para 146.

[11] Hydro Quebec, at para 145.

[12] Science Assessment of Plastic Pollution, at p 8.

plastic Canadian Environmental Protection Act Federal Government toxic substances Environment and Climate Change Canada Ocean Plastics Charter Zero Plastic Waste

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