Vol. 132, No. 35 — August 29, 1998

Ozone-depleting Substances Regulations, 1998

Statutory Authority

Canadian Environmental Protection Act

Sponsoring Department

Department of the Environment

REGULATORY IMPACT
ANALYSIS STATEMENT

Description

Recognizing that chlorofluorocarbons (CFCs) and halons deplete the ozone layer and have adverse effects on the environment, Canada, along with 23 other nations, signed the Montreal Protocol on Substances that Deplete the Ozone Layer on September 16, 1987. This treaty is designed to prevent a global environmental and health problem from reaching the crisis stage.

The Montreal Protocol has been periodically revised to accelerate the phase-out dates of ozone-depleting substances (ODSs) and add new substances considered damaging to the ozone layer. Parties to the Protocol, now totalling 165, have implemented control measures to achieve emission reductions of ODSs. These reductions are intended to prevent damages resulting from gradual destruction of the ozone layer and thus contribute to protecting the environment, health and human life. The reduction of ODS emissions will reduce the number of fatal and non fatal skin cancer cases as well as the number of cataract cases. In addition, such a reduction will contribute to preventing the weakening of the immune system, damages to fisheries, agriculture and material (buildings and equipment) as well as damages resulting from climate change consequences. Finally, a reduction of ODS emissions will contribute to improving the environment and the associated bequest value. The latter is defined in the section addressing the benefits and costs.

Since 1987, Canada has adopted adequate regulations to meet its Montreal Protocol commitments. The Ozone-depleting Substances Regulations (ODS Regulations) control the import, manufacture, use, sale and export of ODSs. They require gradual reductions of the production and import of these substances, as shown in the following phase-out schedule:

CFCs: — 100 percent elimination beginning January 1, 1996(see footnote 1)

Halons: — 100 percent elimination beginning January 1, 1994(see footnote 2)

Carbon Tetrachloride: — 100 percent elimination beginning January 1, 1995(see footnote 3)

Methyl Chloroform: — 100 percent elimination beginning January 1, 1996(see footnote 4)

HBFCs: — 100 percent elimination beginning January 1, 1996(see footnote 5)

Methyl Bromide: — Freeze at base level beginning January 1, 1995

— 25 percent reduction beginning January 1, 1998

HCFCs: — Freeze at base level beginning January 1, 1996

— 35 percent reduction beginning January 1, 2004

— 65 percent reduction beginning January 1, 2010

— 90 percent reduction beginning January 1, 2015

— 100 percent elimination beginning January 1, 2020(see footnote 6)

As well, the ODS Regulations prohibit the use or sale of controlled substances that would have been illegally imported or manufactured after the phase-out date. They also require that permits be obtained to import or export used, recovered, recycled, and reclaimed ozone-depleting substances.

A second regulation, the Ozone-depleting Substances Products Regulations (ODSP Regulations), controls the use of ODSs in specific products.

Since the proposed requirements listed below will affect ODSs used in industrial operations as well as the manufacture of products containing ODSs, it has been decided to merge the two existing regulations to simplify their compliance requirements as well as their enforcement. As previously stated, these two regulations are the Ozone-depleting Substances Regulations, covering ozone depleting substances and the Ozone-depleting Substances Products Regulations, covering products containing ODSs.

The proposed requirements are intended to further reduce ODS emissions. These requirements are as follows:

Requirements to further reduce HCFC emissions

1. Ban HCFCs in uses where alternatives exist

2. Limit HCFC uses to the replacement of ODSs

3. Implement an HCFC reduction schedule similar to the United States'

HCFCs, which have ozone-depleting potentials (ODP) 10 to 50 times lower than CFCs, are being used as transitional substances, but only until substitutes with no ozone depleting potential become available.

The first two requirements are intended to implement principles agreed to by the Parties to the Montreal Protocol at their meeting in Copenhagen in 1992. Their intent is to reduce the use of HCFCs in products and applications for which substitutes to HCFCs are available, mainly in the aerosol, non-insulating foam and solvent sectors. They will also ensure that no new applications of HCFCs are developed, except in rare cases for the protection of human life or human health.

The third requirement is intended to implement additional commitments made by the Canadian government to implement further controls on ODSs with the objective of maximizing the recovery of the ozone layer. This requirement will accelerate the phase-out of dispersive uses of HCFCs and the phase-out of HCFCs that have the highest ozone-depleting potential. Because Canada and the United States (U.S.A.) are an integrated market, adopting a Canadian reduction schedule similar to that of the U.S.A. will create a level playing field for the industry. It will minimize trade concerns and associated expenditures.

Requirements to further reduce emissions of other ODSs

4. Require permits to export products containing CFCs, methyl chloroform, halons and carbon tetrachloride to developing countries

This requirement flows out of the recommendation of the 1995 meeting of the Parties in Vienna. At this meeting, the Parties agreed that measures should be adopted to monitor and control the export of equipment containing ODSs that have become obsolete in developed countries. The intent of this requirement is to meet the concerns of developing countries that benefit from a longer schedule to phase out these substances but do not wish to increase their reliance on substances that they will have to phase out eventually. Used refrigeration or air conditioning equipment using CFCs as refrigerant as well as halon fire extinguishers/systems provide examples of equipment that might be exported to developing countries.

5. Ban the import of products containing CFCs, halons, methyl chloroform and carbon tetrachloride

This requirement is also intended to implement additional commitments made by the Canadian government to further reduce ODS emissions. In Canada, regulatory requirements have prohibited the supply (production plus import) of these substances and thus the manufacture of products containing these substances was also halted. However, developing countries can continue to manufacture CFCs, halons and carbon tetrachloride until 2010, and methyl chloroform until 2015, and could export products containing these substances to Canada. The intent of this requirement is to eliminate that possibility.

These Regulations will come into effect at the date of their registration by the Clerk of the Privy Council.

Alternatives

No other alternatives to amending the existing regulations have been judged appropriate to ensure that the commitments made by the Canadian government under the Montreal Protocol will be met. Existing regulations control ODSs as substances and products containing ODSs. Other measures such as voluntary approaches would not ensure that the expected emission reduction would be met as required by the Montreal Protocol.

Benefits and Costs

This section will analyze the benefits and the costs resulting from the implementation of the amendments to these regulations. It should be noted that for each initiative, an assessment of the present value of the costs and the benefits has been performed. The present value is defined as the sum of money that is required today to cover future expenses given a 7.5 percent discount rate. The net present value is the present value of benefits minus the present value of costs.

Benefits

Three categories of benefits have been quantified:

1. The benefits of reduced operating costs to the private sector resulting from avoided costs related to recycling and destroying ozone depleting substances.

2. The benefits of reduced health care costs and the number of deaths. These benefits are defined as the monetary value associated with the avoided health care costs resulting from a reduction in the number of cases of cataract and non-fatal skin cancers. For the reduction of the number of morbidity cases (skin cancer), the benefits have been assessed by using a value of seven million dollars for each avoided death.

3. Benefits of reduced damages to fisheries, agriculture and material (buildings and equipment) have also been quantified. To assess these, results from a study conducted by Applied Research Consultants have been used. This study established that for each dollar in health-related benefits, there are additional benefits of $0.76 in fisheries, $1.19 in agriculture and $0.20 for materials.

There are other benefits that have not been quantified. These benefits are related to a reduction in damages to the immune system, as well as a reduction in climate change impacts. Finally, the last benefit that has not been quantified is related to the bequest value resulting from environmental improvement. The bequest value is defined as the monetary value the current population is willing to pay to ensure that future generations will benefit from an environment that is either as good as now or better.

Since ODSs have various ozone-depleting potential (ODP), benefit assessment has been standardized and is expressed in dollars per tonne of ODP.

1. Ban HCFCs in uses where alternatives exist

This measure will affect three sectors: non-insulating foams, aerosols and solvents. HCFCs will no longer be used in these sectors, resulting in an emission reduction of HCFCs. The benefits resulting from such a ban are quantified by assessing the reduction of health care costs (number of cases of cataracts and health care costs associated with non-fatal skin cancer) and the number of morbidity cases (fatal skin cancer). A reduction in damages to fisheries, agriculture and material has also been quantified. It has been estimated that these benefits will amount to $14,660 per year for each tonne of ODP that will be prevented from being emitted. Evaluated from 1999 to 2003 and using 7.5 percent as discount rate, the corresponding present value will total $1,907,808 (1997 $). Table 1 provides a summary of annual benefits and the present value of these benefits that will result from implementing such a control.

Table 1: Annual benefits and present value of benefits of a ban of HCFCs in uses where alternatives exist

Affected Sector	Annual Benefits (1997 $)	Present Value of Benefits 1999 to 2003; 7.5% (1997 $)
Non-insulating foams	193,513	602,920
Aerosols	322,522	652,444
Solvents	322,522	652,444
TOTAL	838,588	1.907,808

2. Limit HCFC uses to the replacement of ODSs

After consultation with affected industries, it appears that present, HCFC uses are limited to the replacement of ODSs. Even though HCFCs are not likely to have new uses between now and 2020, it would be possible that without this measure, the private sector could invest to find other HCFC uses than to replace ODSs. The benefits are thus all avoided costs. These benefits are as follows:

— Research and development (R&D) expenses to find new HCFC uses (other than ODS replacements) will be avoided as well as expenditures to apply these new uses in industrial processes.

— Since HCFCs contribute to depleting the ozone layer, the Montreal Protocol will require that the use of HCFCs in these new applications be phased out. The compliance costs to the private sector (investment and operating costs) will be avoided as well as the enforcement costs to governments.

Not knowing which industrial sectors would use HCFCs other than to replace ODSs, it is not possible to estimate the quantity that would be consumed without these Regulations, as well as the associated benefits in terms of avoided expenditures mentioned above. It should also be mentioned that this restricted use would contribute to preventing damages to health and the environment. These damages are: fatal and non-fatal skin cancer cases, weakening of immune systems, cataract cases, damages to fisheries, agriculture, materials such as buildings and equipment as well as impacts from climate change and the bequest value for future generations.

3. Implement an HCFC reduction schedule similar to the U.S.A.'s

The American HCFC reduction schedule plans to accelerate the phase-out of HCFC-141b in 2003, HCFC-22 and HCFC-142b in 2010 and HCFC-124 in 2015.

To quantify the benefit related to this initiative, the reduction of emitted tonnes of HCFC (ODP) had to be assessed further to the implementation of the American reduction schedule in Canada. This reduction is assessed, for each year, by calculating the volume of HCFC Canada would not be able to consume. This can be calculated by adding the American reduction schedule of HCFC to the current Canadian system of transferable allowances.

This initiative will ensure that Canadian HCFC controls are consistent with those of the U.S.A., except for the substance HCFC-141b used as rigid foam blowing agent. This application will be phased out under a voluntary agreement in Canada. Consequently, this measure will not take into consideration benefits related to HCFC-141b.

There has been an integration of the North American market further to the implementation of the North American Free Trade Agreement (NAFTA). This integration resulted in that both countries use the same equipment requiring HCFC-22. Consequently, a reduction schedule similar to that of the U.S.A. will have no incremental impact for HCFC-22.

The implementation of this measure will prevent emissions of HCFC-142b and HCFC-124. This measure will thus contribute to reducing health care costs as well as fatal skin cancer cases; it will also reduce damages to fisheries, agriculture and material (buildings and equipment). The above-mentioned benefits are expected to total $14,660 per year for each tonne of ODP that will not be emitted. The annual benefits for each substance are as follows:

— HCFC-142b: $733,006 in 2010 and 2011;

— HCFC-124: $60,106 in 2015 and an average of $64,500 from 2016 to 2019;

— HCFC-22: no impacts are expected; consequently, benefits are zero.

The present value of these benefits, discounted from 1999 to 2019 and using a 7.5 percent discount rate, will total $674,619 (1997 $) as shown in Table 2. For reasons mentioned above, these benefits are underestimated since they do not consider the reduced damages to the human immune system, climate change and the bequest value.

Table 2: Present value of benefits resulting from the implementation of an HCFC reduction schedule similar to the U.S.A.'s

Affected Chemical Compounds	Present Value of Benefits (22 years, 7.5%) (1997 $)
HCFC-142b	594,039
HCFC-124	80,580
HCFC-22	0
TOTAL	674,619

In addition to providing the above-mentioned benefits, Canadian environmental controls similar to American measures will require Canadian firms to further reduce their use of HCFCs as well as related products containing them. Such a measure will minimize trade concerns and associated expenditures.

4. Require permits to export products containing CFCs, methyl chloroform, halons and carbon tetrachloride to developing countries

Based on interviews with potential exporters, this control will not affect any exports; consequently, benefits are zero.

5. Ban the import of products containing CFCs, halons, methyl chloroform and carbon tetrachloride

There are no benefits from controlling carbon tetrachloride and methyl chloroform in imported products, since there will be no imports of such products.

For halons, recycled halons 1211 and 1301 are being used in new portable fire extinguishers and in new total-flooding systems. However, these uses are confined in both cases to aircraft applications, that are exempt for the purpose of this analysis.

In the case of CFCs, such a control will prevent import of products containing CFCs and will thus contribute to reducing CFC emissions. The benefits are then quantified by assessing prevented damages to the ozone layer and avoided recovery costs of these substances because of the reduction in CFCs used.

Representatives of the CFC industry mentioned that this measure will only affect the import of small refrigerators. They stated that in 1998, without this control, there would be 84 250 refrigerators imported into Canada, containing CFC-12 as a refrigerant and CFC-11 as a blowing agent, and the number of these imported refrigerators would gradually decrease to reach 0 by 2010. The benefits will then be proportional to the reduction of CFC emissions resulting from a ban of these imported refrigerators. To quantify health and environmental benefits, we associate $14,660 per year for each tonne of ODP that will not be emitted. The corresponding annual benefits are expected to fluctuate from $69,098 in 1999 to $6,910 in 2009. The corresponding present value of these benefits would amount to $333,130, using 7.5 percent as the discount rate.

In addition to these benefits, a ban on the import of products containing CFCs will also generate economic benefits in the form of avoided costs. These costs would be related to the recovery and destruction of remaining CFCs in targeted products at the end of their lives if there were no import ban. Since the recovery and destruction costs are estimated to amount to $13,000 per tonne of ODP, the corresponding annual avoided costs vary from $561,600 in 1999 to $56,160 in 2009. The corresponding present value of these benefits evaluated for the period from 1999 to 2009 totals $2,706,769, using 7.5 percent as the discount rate.

As shown in Table 3, the resulting total present value of these benefits will then total $3,039,898, using 7.5 percent as the discount rate.

Table 3: Present value of benefits resulting from a ban on the import of products containing CFCs

Discount rate	Present Value of Benefits Related to Prevented Damages to Health and the Environment (1997 $)	Present Value of Benefits Related to Avoided Operating Costs (1997 $)	Present Value of Total Benefits (1997 $)
7.5%	333,130	2,706,769	3,039,898

Since these benefits do not include reduced damages to the human immune system, the bequest value for future generations and reduced damages related to climate change, they are likely underestimated.

Costs

1. Ban HCFCs in uses where alternatives exist

This measure will affect aerosols, solvents and non-insulating foams.

This measure will impact flexible foam manufacturers who use HCFC-141b. To be in compliance with this control, manufacturers will have to invest an average of $2 million per plant. It is estimated that six of the ten plants now operating in Canada will require such an investment for a total investment of $12 million to be incurred by the year 2000. It should be noted that without this control, conversion away from HCFC-141b will be necessary after 2003, because it is expected that Canadian manufacturers will not be able to be supplied with this substance. Consequently, the incremental costs are restricted to the costs of converting earlier, that is, in the year 2000 instead of in 2003. The corresponding present value of these costs, assessed from 1999 to 2003, will amount to $2,025,288, using 7.5 percent as the discount rate.

In the case of aerosols, a prohibition on the use of HCFCs will cost the private sector an additional $2 per kilogram that will not be used. Since it is estimated that 200 000 kg of HCFCs would have been used in each year from 1999 to 2003, the total annual cost will amount to $400,000 per year. The present value of these costs evaluated from 1999 to 2003 and using 7.5 percent as a discount rate will amount to $1,618,354 (1997 $).

For solvents, a prohibition on the use of HCFCs will also cost the private sector an additional $2 per kilogram that will not be used. Since 200 000 kg of HCFCs would have been used in each year from 1999 to 2003, the total annual cost is identical to that for aerosols and will amount to $400,000 per year. The present value of these costs evaluated from 1999 to 2003 and using 7.5 percent as a discount rate will amount to $1,618,354 (1997 $).

Table 4: Present value of costs resulting from a ban of HCFCs where alternatives exist

Sectors	Present Value of Costs (6 years, 7.5 percent) (1997 $)
Non-insulating foams	2,025,288
Aerosols	1,618,354
Solvents	1,618,354
TOTAL	5,261,996

2. Limit HCFC uses to the replacement of ODSs

Since there are no expected uses for HCFCs other than to replace ODSs, there are no expected expenditures to the private sector. It should be noted that these Regulations are proactive, since they prevent the private sector from investing to find HCFC applications other than ODS substitutes.

3. Implement an HCFC reduction schedule similar to the U.S.A.'s

The private sector will have to account for additional costs to comply with this measure. The cost assessment took into consideration additional expenses for adding American reduction schedule to the current Canadian system of transferable allowances.

HCFC-141b used in rigid foam blowing applications is not part of these Regulations, since the use of HCFC-141b for this application will be phased out on a voluntary basis in Canada; consequently, the compliance costs to the private sector will not be taken into consideration.

In the case of HCFC-142b, a reduction schedule similar to that of the U.S.A. is expected to cost $2 per kg of HCFC that will not be used. It has been estimated that affected firms will face a reduction of 769 tonnes, creating an annual incremental cost of $1,538,000 for 2010 and 2011.

For HCFC-124, the private sector will need to reduce its use by an additional 200 tonnes per year from 2015 to 2019; using $2 per kg that will not be used, this corresponds to an incremental cost of $400,000 per year.

Since Canada and the U.S.A. use the same equipment requiring HCFC-22 because of the integrated North American market, a Canadian reduction schedule similar to the U.S.A. will have no incremental impact for HCFC-22.

As shown in Table 5, the present value of these costs discounted from 1999 to 2019 and using a 7.5 percent discount rate will total $1,748,830 (1997 $).

Table 5: Present value of costs resulting from an HCFC reduction schedule similar to that of the U.S.A.

Affected Substances	Present Value of Costs (22 years, 7.5 percent) (1997 $)
HCFC-142b	1,246,420
HCFC-124	502,410
HCFC-22	0
TOTAL	1,748,830

4. Require permits to export products containing CFCs, methyl chloroform, halons and carbon tetrachloride to developing countries

After having consulted with manufacturers in the air conditioning sector as well as in the halon-based fire-protection sector, it appears that there is very limited trade for this type of equipment since when it is replaced, it is scrapped.

It should however be noted that even though it has not been possible to find a potential trading market, it might be possible that some equipment be exported in the future. This might happen because it may be impossible for Canadian firms to be supplied with ODSs to service such equipment. Companies would therefore have to replace this equipment before the end of their expected life span and could export the used equipment to developing countries, where CFCs and halons will still be available for several years. Under such a scenario, the cost of this measure would deal with the expenses to obtain an export permit if such equipment could be exported or to ensure the remaining ODSs are recycled and/or disposed of if the export is not possible. However, it has not been possible to quantify these costs since we have no information on the quantity of equipment that could be involved.

5. Ban the import of products containing CFCs, halons, methyl chloroform and carbon tetrachloride

Even though a ban on products containing CFCs and halons could affect air conditioning , refrigeration and fire extinguishers, it appears that this measure will only affect small refrigerators which could be imported between 1999 and 2010. Based on interviews with industrial representatives, such a control is expected to increase the cost of small refrigerators by 5 percent. Based on the average price of refrigerators and the number of refrigerators that are sold each year, this price increase will total $995,682 per year from 1999 to 2010. The resulting present value of these costs, estimated from 1999 to 2010 and using 7.5 percent as the discount rate, will total $8,121,270 (1997 $).

For halons, recycled halons 1211 and 1301 are being used in new portable extinguishers and in new total flooding systems. However, these uses are confined in both cases to aircraft applications, which are exempt in these proposed amendments.

In the case of methyl chloroform and carbon tetrachloride, there are no recorded data available on actual imports, which imply that if such imports exist, they are negligible. Consequently, the cost associated with a ban on import products containing methyl chloroform and carbon tetrachloride will also be negligible.

6. Enforcement costs to the Government

The cost prior to the promulgation of these amendments is estimated to $150,000 and covers expenses related to the development of the Regulations, which include consultations, drafting of the Regulations and preparation of training material for inspectors. From 1999, the Government will have to ensure the enforcement of these Regulations which will require an incremental one person-year at $70,000 per year. The present value of these costs, evaluated from 1999 to 2019 and using 7.5 percent as the discount rate, will total $878,944 (1997 $)

Table 6 provides a summary of the present values of costs and benefits as well as the net present value which is defined as the present value of the benefits minus the present value of the costs.

Table 6: Present value of costs and benefits as well as net present values

Initiatives	Present Value of Costs (1997 $)	Present Value of Benefits (1997 $)	Net Present Value (1997 $)
1. Ban HCFCs in uses where alternatives exist	5,261,996	1,907,808	(3,354,188)
2. Limit HCFC uses to the replacement of ODSs	0	0	0
3. Implement an HCFC phase-out schedule similar to that of the U.S.A.	1,748,830	674,619	(1,074,211)
4. Require permits to export products containing CFCs, MCF, halons and CTC to developing countries	0	0	0
5. Ban the import of products containing CFCs, halons, MCF and CTC	8,121,270	3,039,898	(5,081,372)
6. Enforcement costs to government	878,944	N/A	(878,944)
TOTAL	16,011,040	5,622,325	(10,388,715)

As shown in Table 6, the present value of the costs exceeds the present value of the benefits. However, it should be noted that the benefits are underestimated since they do not consider the benefits resulting from avoided damages to the human immune system, climate change and the bequest value.

Consultation

Environment Canada recognizes that consultation with all concerned parties, including those directly affected by these Regulations, as well as non-governmental organizations and the general public, ensures that effective and realistic measures are developed for the protection of the environment. The Ozone Layer Protection Program has held consultations with representatives of industry, environmental groups, the provinces, and other federal departments.

A discussion document was distributed in June 1996 and a consultation meeting was held in October of the same year. Proposed amendments were also distributed in June 1997 and April 1998. The comments raised were as follows:

1. Ban HCFCs in uses where alternatives exist

Since such a requirement is in force in the U.S.A., most of the comments agree with this initiative because of positive economic impacts related to a level playing field of environmental measures between the integrated market of Canada and the United States. However, some industrial sectors were concerned by the lack of adequate alternatives to HCFCs and the proposed time-frame to eliminate HCFC uses.

Environment Canada recognizes the importance of having a level playing field between Canada and the United States. At the same time, it must be recognized that additional alternatives have been made available since the U.S.A. ban of non-essential uses was put in place in 1994. For this reason, the list of Canadian exempted end uses differs from the American list.

2. Limit HCFC uses to the replacement of ODSs

Most of the comments are in agreement with this initiative as long as a mechanism exists to guarantee that new applications that could be beneficial for society would be approved.

Environment Canada recognizes that such flexibility is required to exempt applications that could have a positive result in protecting life and human health as recommended by the Montreal Protocol.

3. Implement an HCFC phase-out schedule similar to the U.S.A.

Most of the comments support this initiative since it provides a level playing field between Canada and the United States and will contribute to facilitating trade with the U.S.A. The initial proposal for this measure was to adopt the American phase-out schedule in its entirety. However, major concerns were raised by the rigid polyurethane foam blowing sector regarding the phase-out of HCFC-141b in 2003, because of the lack of alternatives and belief that the American deadline might get changed. Given the uncertainty surrounding the use of HCFC-141b in this sector, Environment Canada proposed to achieve the phase-out of this substance in foam blowing under a voluntary agreement.

4. Require permits to export products containing CFCs, methyl chloroform, halons and carbon tetrachloride to developing countries

All comments that have been raised support this measure.

5. Ban the import of products containing CFCs, halons, methyl chloroform and carbon tetrachloride

Most of the comments raised are supportive of this measure because it puts the same restrictions on importers as exist for Canadian manufacturers. Raised concerns were expressed regarding the need to provide exemptions for halon fire extinguishers used on aircrafts, and to include critical use exemptions that exist under provincial regulations; the proposed Regulations include some exemptions for uses that are considered critical.

Compliance and Enforcement

Since the Regulations are promulgated under the Canadian Environmental Protection Act (CEPA), the Enforcement and Compliance Policy implemented under the Act will be applied by CEPA enforcement officers. Among other things, the policy outlines measures designed to promote compliance, including education and information, and to promote technical development and consultation on the preparation of regulations.

In verifying compliance with these Regulations, CEPA inspectors will abide by the Enforcement and Compliance Policy, which sets out a range of possible responses to offenses: warnings, inspector's guidelines, ticketing, ministerial orders, injunctions, prosecution, and civil suits by the Crown for the recovery of costs in specified circumstances. If, on inspection or following the report of a suspected offense, a CEPA inspector confirms that an offense has been committed, the inspector will select the appropriate response, based on the following criteria:

— Nature of the offense: This includes consideration of the damage, the intent of the alleged offender, whether it is a repeat offense, and whether an attempt has been made to conceal information or otherwise subvert the objectives and requirements of the Act.

— Effectiveness in achieving the desired result with the offender: The desired result is compliance within the shortest possible time and with no further repetition of the offense. Factors to be considered include the offender's history of compliance with the Act, willingness to cooperate with enforcement officials, and evidence of corrective action already taken.

— Consistency: Inspectors will consider how similar situations have been handled in determining the measures to be taken to enforce the Act.

Contacts

Bernard Madé, Commercial Chemicals Evaluation Branch, Toxic Pollution Prevention Directorate, Department of the Environment, Ottawa, Ontario K1A 0H3, (819) 994-3249 (Telephone), bernard. made@ec.gc.ca (Electronic Mail); or Arthur Sheffield, Options Analysis Division, Economic and Regulatory Affairs Directorate, Department of the Environment, Ottawa, Ontario K1A 0H3, (819) 953-1172 (Telephone), arthur.sheffield@ec.gc.ca (Electronic Mail).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 48(1) of the Canadian Environmental Protection Act(see footnote a), that the Governor in Council, pursuant to sections 22 and 34(see footnote b) of the Act, proposes to make the annexed Ozone-depleting Substances Regulations, 1998.

Any person may, pursuant to subsection 48(2) of the Act, file a notice of objection in respect of the proposed Regulations with the Minister of the Environment within 60 days after the date of publication of this notice requesting that a board of review be established under section 89 of the Act and stating the reasons for the objection. All such notices of objection must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Director, Commercial Chemicals Evaluation Branch, Department of the Environment, Ottawa, Ontario K1A 0H3.

August 26, 1998

MICHEL GARNEAU
Assistant Clerk of the Privy Council

OZONE-DEPLETING SUBSTANCES REGULATIONS, 1998

INTERPRETATION

1. The definitions in this section apply in these Regulations.

"Act" means the Canadian Environmental Protection Act. (Loi)

"authorized sector" means, in respect of the use of an HCFC, one of two categories of use, namely,

(a) for cooling, whether in refrigeration or air-conditioning and

(b) for use in any other application. (domaine autorisé)

"baseline consumption allowance", in respect of a group of controlled substances set out in column 1 of an item of Schedule 1 and a year set out in column 2 of that item, means the quantity of those controlled substances that is determined in accordance with subsection 10(4) or (6) with respect to a person. (allocation de consommation de base)

"bromofluorocarbon" means a fully halogenated bromofluorocarbon each molecule of which contains one, two or three carbon atoms and at least one atom each of bromine and fluorine. (bromofluorocarbure)

"calculated level", in respect of

(a) a controlled substance that is produced, imported, exported or consumed during a given period, means the quantity of the controlled substance, determined in accordance with one of the following formulas, namely,

where

(b) a group of controlled substances set out in column 1 of Schedule 2 that are produced, imported, exported or consumed during a given period, means the sum of the calculated levels of production, importation, exportation or consumption, as the case may be, of the controlled substances within the group during that period, determined in accordance with the applicable formula set out in paragraph (a). (niveau calculé)

"Canada's maximum consumption", in respect of a group of controlled substances set out in column 1 of an item of Schedule 1 and a year set out in column 2 of that item, means Canada's total allowable calculated level of consumption of those controlled substances according to the Protocol multiplied by the percentage set out in column 3 of that item. (consommation canadienne maximale)

"chlorofluorocarbon" or "CFC" means a fully halogenated chlorofluorocarbon each molecule of which contains one, two or three carbon atoms. (chlorofluoroalcane ou CFC)

"consumption", in respect of a given period and a controlled substance or group of controlled substances, means the sum of the quantities produced and imported during that period less the quantity exported and, for the purpose of determining a calculated level of consumption, excludes any quantity of the controlled substance that, when imported or exported, was a recovered, recycled, reclaimed or already used controlled substance. (consommation)

"consumption allowance" means an initial consumption allowance or baseline consumption allowance, whether or not increased or decreased under sections 11 to 14. (allocation de consommation)

"controlled substance" means a substance set out in column 2 of an item of Schedule 2, whether existing alone or in a mixture, and includes isomers of any such substance unless otherwise indicated. (substance contrôlée)

"Decision" means a decision taken at a meeting of the Parties under Article 11 of the Protocol. (Décision)

"essential use" means a use that is agreed by the Parties, by a Decision, to be essential. (utilisation essentielle)

"feedstock" means any controlled substance that is used and transformed in the manufacture of another chemical substance. (matière première)

"foam insulation product" means a product that contains or consists of any of the following types of foam:

(a) closed cell rigid polyurethane foam, including one and two component froth, pour, spray, injected and bead-applied foam and polyisocyanurate foam;

(b) closed cell rigid polystyrene boardstock foam;

(c) closed cell rigid phenolic foam; and

(d) closed cell rigid polyethylene foam when such foam is suitable in shape, thickness and design to be used as a product that provides thermal insulation around pipes used in heating, plumbing, refrigeration or industrial process systems. (produit d'isolation en mousse)

"foaming agent" means any chemical that is added to any plastic during the process of manufacturing plastic foam so that gas cells are formed throughout the plastic. (agent de gonflement)

"heel", in respect of a controlled substance, means a quantity left in a container after its use and that does not exceed 10% of the total capacity in weight of the container for that controlled substance. (quantité résiduelle)

"hydrobromofluorocarbon" means a hydrobromofluorocarbon each molecule of which contains one, two or three carbon atoms and at least one atom each of hydrogen, bromine and fluorine. (hydrobromofluorocarbure)

"hydrochlorofluorocarbon" or "HCFC" means a hydrochlorofluorocarbon each molecule of which contains one, two or three carbon atoms and at least one atom each of hydrogen, chlorine and fluorine. (hydrochlorofluorocarbure ou HCFC)

"industrial cleaning" means use of a solvent for cold cleaning or vapour degreasing, whether for electronics cleaning, metal cleaning or precision cleaning, and excludes wipe cleaning, maintenance cleaning and other small use applications. (nettoyage industriel)

"initial consumption allowance" means the quantity of HCFCs that is determined in accordance with subsection 10(1) or (3) with respect to a person. (allocation de consommation initiale)

"Party" means

(a) a Party to the Protocol; or

(b) any State not party to the Protocol but that meets the conditions referred to in paragraph 8 of Article 4 of the Protocol. (Partie)

"pest" means pest as defined in section 2 of the Pest Control Products Act and includes any organism that could cause disease in humans or animals. (parasite)

"plastic foam" means a plastic the weight per unit of volume of which is decreased substantially by the use of a foaming agent during the manufacturing process. (mousse plastique)

"pre-shipment application" means the treatment, with methyl bromide, of a commodity or product that is to be entirely exported to a country, or of a means of conveyance, where such treatment is required by the importing country or in support of Canada's sanitary or phytosanitary export programs. (traitement préalable à l'expédition)

"production", in respect of a controlled substance or group of controlled substances, means the quantity manufactured. (production)

"Protocol" means The 1987 Montreal Protocol on Substances that Deplete the Ozone Layer, published by the United Nations Environment Programme, signed by Canada on September 16, 1987, as amended from time to time. (Protocole)

"quarantine application" means the treatment, with methyl bromide, of a commodity, product, facility or means of conveyance where the treatment is intended to prevent the spread of, or to control or eradicate, pests of quarantine significance and is required by the laws of an importing country as a condition of entry or by or under Canadian law. (traitement en quarantaine)

"reclaimed", in respect of a controlled substance, means recovered, re-processed and upgraded through processes such as filtering, drying, distillation and chemical treatment in order to restore the controlled substance to industry-accepted reuse standards. (régénérée)

"recovered", in respect of a controlled substance, means

(a) collected after it has been used; or

(b) collected from machinery, equipment or a container during servicing or before disposal of the machinery, equipment or container. (récupérée)

"recycled", in respect of a controlled substance, means recovered, cleaned by a process such as filtering or drying, and reused, including reused to recharge equipment. (recyclée)

"transferee" means a person who acquires or proposes to acquire from a transferor all or a portion of the transferor's consumption allowance. (cessionnaire)

"transferor" means a person who transfers or proposes to transfer to a transferee all or a portion of the person's consumption allowance. (cédant)

"unexpended consumption allowance" means the portion of a consumption allowance that has not been used during a year. (allocation de consommation restante)

"year" means a calendar year. (année)

NON-APPLICATION

2. These Regulations do not apply to a controlled substance if the controlled substance is produced incidentally in the manufacture of other chemical substances.

PART 1

CONTROLLED SUBSTANCES

Application

3. This Part applies to a controlled substance that is included in the definition of controlled substance in paragraph 4 of Article 1 of the Protocol as clarified by Decision I/12A as amended from time to time, and to methyl bromide even if contained in a manufactured product.

Prohibition

4. No person shall import or export a controlled substance other than HCFCs from or to a State that is not a Party.

Restrictions

5. (1) No person shall import a recovered, recycled, reclaimed or already used controlled substance or a controlled substance for destruction without a permit issued under paragraph 33(1)(a).

(2) A person in possession of a quantity of a recovered, recycled, reclaimed or already used controlled substance that was imported for reclamation in Canada and that cannot be exported back to the country of origin shall, within a reasonable time, destroy that quantity by using an efficient destruction technique in accordance with the Code of Good Housekeeping Procedures set out in section 5.5 of the Report of the Ad Hoc Technical Advisory Committee on Destruction Technologies or export it for destruction.

6. (1) No person shall export a controlled substance without a permit issued under paragraph 33(1)(b).

(2) Subsection (1) does not apply to a controlled substance that is a heel.

7. (1) No person shall manufacture, use, sell, offer for sale, import or export a controlled substance within a group set out in column 1 of an item of Schedule 4, on or after the date of prohibition set out in column 2 of that item.

(2) Subsection (1) does not apply if

(a) the controlled substance is recovered, recycled, reclaimed, already used or for destruction;

(b) the person uses, sells or offers for sale

(c) the person manufactures or imports, under a permit issued under paragraph 33(1)(c), a controlled substance set out in column 2 of an item of Schedule 3 for a purpose set out in column 3 of that item;

(d) the person exports for a purpose set out in column 3 of Schedule 3, under a permit issued under paragraph 33(1)(b), a controlled substance that was previously manufactured or imported under a permit issued under paragraph 33(1)(c);

(e) the person exports a controlled substance under a permit issued under paragraph 33(1)(b) and the substance was imported by mistake or without the importer's consent; or

(f) the person exports a controlled substance that is a heel.

8. (1) Subject to subsections (3) and (5), no person shall manufacture HCFCs or methyl bromide.

(2) Subject to subsections (3) to (5), no person shall import HCFCs or methyl bromide unless it is recovered, recycled, reclaimed or already used or for destruction.

(3) A person may manufacture or import HCFCs in a year if

(a) the person has been informed in writing by the Minister of their initial consumption allowance of HCFCs and the authorized sector for the year;

(b) the person has been issued a permit for the year under paragraph 33(1)(d) and has been informed in writing by the Minister as to the authorized sector;

(c) the person has been informed in writing by the Minister of their baseline consumption allowance of HCFCs and the authorized sector for the year; or

(d) the person has been informed in writing by the Minister that a transfer to them of unexpended consumption allowance of HCFCs for the year is allowed under subsection 12(3).

(4) A person may import methyl bromide during a year if

(a) the person

(b) the person has been informed in writing by the Minister that a transfer to them of unexpended consumption allowance of methyl bromide for the year is allowed under subsection 12(3).

(5) A person may manufacture or import a controlled substance referred to in column 2 of item 5 or 6 of Schedule 3 for a purpose set out in column 3 of that item if the person has been issued a permit under paragraph 33(1)(c).

9. A person in possession of a quantity of a controlled substance that is set out in column 2 of an item of Schedule 3, that was manufactured or imported under a permit issued under paragraph 33(1)(c) and is no longer needed for a purpose set out in column 3 of that item shall, within a reasonable time,

(a) destroy that quantity by using an efficient destruction technique referred to in subsection 5(2);

(b) export that quantity for destruction or for use for a purpose set out in column 3 of that item; or

(c) include that quantity as part of their calculated level of consumption, where doing so would not result in their consumption allowance being exceeded.

Consumption Allowance

10. (1) Subject to subsection (2), a person's initial consumption allowance of HCFCs for an authorized sector for each year that falls within the period that begins January 1, 1996 and ends December 31, 1999 is the sum of

(a) the person's calculated level of consumption of HCFCs for that sector for 1994, and

(b) the calculated level of the quantity of HCFCs that is equivalent to the person's consumption of CFCs for that sector in 1994 for which it was determined by the Minister, based on the information received in response to a notice published or sent under section 16 or 18 of the Act, that those CFCs will be replaced by HCFCs.

(2) A person's initial consumption allowance of HCFCs for a year referred to in subsection (1) is zero unless the person provides, before December 1 in the previous year, information about the manufacture, importation and use of HCFCs and CFCs for 1994 as required by a notice published or sent under section 16 or 18 of the Act.

(3) A person's initial consumption allowance of HCFCs for an authorized sector for each year that falls within the period that begins

(a) on January 1, 2000 and ends on December 31, 2003 is the average of their calculated level of consumption of HCFCs for that sector for 1997 and 1998;

(b) on January 1, 2004 and ends on December 31, 2009 is the average of their calculated level of consumption of HCFCs for that sector for 2001 and 2002 multiplied by 65%;

(c) on January 1, 2010 and ends on December 31, 2014 is the average of their calculated level of consumption of HCFCs for that sector for 2007 and 2008 multiplied by 35%;

(d) on January 1, 2015 and ends on December 31, 2019 is the average of their calculated level of consumption of HCFCs for that sector for 2012 and 2013 multiplied by 10%; and

(e) on January 1, 2020 and ends on December 31, 2029 is the average of their calculated level of consumption of HCFCs for that sector for 2017 and 2018 multiplied by 0.5%.

(4) When the sum of all initial consumption allowances of HCFCs and all calculated levels of consumption allowed under permits issued under paragraph 33(1)(d) reaches 90% of Canada's maximum consumption of HCFCs for a year within one of the periods described in subsection (1) or (3), the baseline consumption allowance of HCFCs for a person for an authorized sector for the year and each subsequent year in that period is the sum of

(a) the person's initial consumption allowance of HCFCs for that sector for the year,

(b) the person's calculated level of consumption for the year allowed under permits issued under paragraph 33(1)(d) for that sector, and

(c) the result obtained by multiplying the remainder of Canada's maximum consumption of HCFCs for the year by the ratio of

to

(5) Where a person has an initial consumption allowance of HCFCs or a permit issued under paragraph 33(1)(d) for an authorized sector for a year, the baseline consumption allowance under subsection (4) for that sector for the year replaces that initial consumption allowance or that permit.

(6) Subject to subsection (7), a person's baseline consumption allowance of methyl bromide for a year is the product obtained by multiplying Canada's maximum consumption of methyl bromide for that year by the ratio of

(a) the average amount of methyl bromide applied or used by that person or applied as a fumigant by a foreign applicator on that person's behalf in 1991, 1992 and 1993

to

(b) the difference between

(7) A person's baseline consumption allowance of methyl bromide for a year is zero if

(a) the person has not provided, before December 1 in the previous year, information about the importation, distribution, application and use of methyl bromide for 1991, 1992 and 1993 as required by a notice published or sent under section 16 or 18 of the Act;

(b) the person has not provided, before December 1 in the previous year, the annual report about methyl bromide referred to in subsection 16(1) for the year preceding the previous year; or

(c) the person has provided to the Minister, before December 1 in the previous year, notice in writing in the form approved by the Minister in which the person states their intention to give up their allowance.

Adjustments to Consumption Allowance

11. (1) Subject to subsection (2), the Minister shall, on application for an adjustment in the form approved by the Minister by a person who has a consumption allowance for a group of controlled substances mentioned in a schedule to these Regulations, increase that consumption allowance for a year and inform the person in writing of the increase, if

(a) during the year, a quantity of a controlled substance within the group has been exported by a person who does not have a consumption allowance for that group;

(b) the controlled substance exported was not a recovered, recycled, reclaimed or already used controlled substance;

(c) the increase will not affect Canada's ability to meet its obligations under Article 2 of the Protocol; and

(d) the controlled substances within the group are needed for use in Canada.

(2) The amount by which a person's consumption allowance is increased for a year under subsection (1), or the total of all such amounts where more than one person's consumption allowance is increased, shall not exceed the sum of the calculated levels of exportation of all controlled substances within the group that are exported during the year by persons who do not have a consumption allowance for that group.

Transfers of Consumption Allowance

12. (1) No person who has a consumption allowance for a group of controlled substances for a year shall transfer all or any portion of the person's consumption allowance for that year unless the Minister allows the transfer under subsection (3) and so informs the transferor and the transferee in writing.

(2) Where a transfer is proposed, the transferor and transferee shall apply to the Minister in the form approved by the Minister.

(3) The Minister shall allow a transfer

(a) if the transferor's unexpended consumption allowance is not less than the quantity of the proposed transfer;

(b) in the case of HCFCs, if the transferee undertakes to use the consumption allowance for the same authorized sector as the transferor used it; and

(c) in the case of HCFCs, if the transferor has

(4) Where the Minister has allowed a transfer and discovers that the transferor did not comply with paragraph (3)(a) or (c) or that the transferee breached the undertaking referred to in paragraph (3)(b), the Minister shall transfer from the transferee back to the transferor any of the unexpended consumption allowance unused by the transferee.

13. No person who has a consumption allowance for a group of controlled substances for a year shall transfer all or any portion of the person's consumption allowance in excess of the person's unexpended consumption allowance for the year.

14. When the Minister allows the transfer of a consumption allowance under subsection 12(3),

(a) the consumption allowance of the transferor for a group of controlled substances is the transferor's consumption allowance before the transfer less the portion of consumption allowance transferred; and

(b) the consumption allowance of the transferee for a group of controlled substances is the sum of the transferee's consumption allowance, if any, before the transfer and the portion of the consumption allowance transferred.

Restrictions on Manufacture, Import and Export

15. (1) No person who has a consumption allowance or who holds a permit issued under paragraph 33(1)(d) for a group of controlled substances shall have, during a year, a calculated level of consumption for the group that exceeds the consumption allowance or the calculated level of consumption allowed under the permit for the year.

(2) If a person destroys a controlled substance within a group by using an efficient destruction technique referred to in subsection 5(2), or uses a controlled substance within a group as feedstock, the person's calculated level of production for the group is reduced by the quantity so destroyed or used.

(3) If a person imports or exports a recovered, recycled, reclaimed or already used controlled substance within a group, the quantity imported or exported shall not be included in the person's calculated level of consumption for the group.

(4) No person shall, for a year, add to a consumption allowance any unexpended consumption allowance from a previous year.

Reporting

16. (1) Every person who in a year has a consumption allowance or has been issued a permit referred to in this Part shall submit to the Minister, in the form approved by the Minister, an annual report.

(2) After December 31, 1998, a person who imports or exports a recovered, recycled, reclaimed or already used substance, other than methyl bromide or HCFCs, shall submit to the Minister a quarterly report in the form approved by the Minister and a copy of Canada Customs Coding Forms B3 and B13.

(3) An annual report referred to in subsection (1) shall be submitted within 30 days after the last day of the previous year whether or not manufacturing, importing or exporting took place during the year.

(4) A quarterly report referred to in subsection (2) shall be submitted within 30 days after the last day of the previous quarter whether or not importing or exporting took place during the quarter.

(5) A person who manufactures, uses, sells, offers for sale, imports or exports a controlled substance shall, if the Minister requests it, provide to the Minister any information required to meet Canada's obligations under the Protocol within the time mentioned in the request.

Maintenance of Records

17. (1) Every person who, during a year, manufactures, imports or exports a controlled substance shall

(a) maintain records for the year containing the applicable information specified in Schedule 6; and

(b) keep the records at a place in Canada for a period of five years after the records are made.

(2) Where a controlled substance set out in column 2 of an item of Schedule 3 was manufactured or imported under a permit issued under paragraph 33(1)(c) for a purpose set out in column 3 of that item, every person who, during a year, uses, sells or offers for sale that controlled substance for that purpose shall

(a) maintain records for the year containing the applicable information specified in Schedule 6; and

(b) keep the records at a place in Canada for a period of five years after the records are made.

(3) Every person who, during a year, imports or exports a controlled substance shall provide a copy of their permit, or of the Minister's written confirmation of their consumption allowance to an officer as defined under the Customs Act who requests it.

(4) Every person referred to in subsections (1) and (2) shall, on request from the Minister, submit to the Minister the applicable information specified in Schedule 6.

PART 2

SPECIFIC USES OF CONTROLLED SUBSTANCES

Restrictions on CFCs, Bromofluorocarbons, Tetrachloromethane or 1,1,1-trichloroethane

18. (1) No person shall manufacture or import a product that contains or is intended to contain any CFC, bromofluorocarbon, tetrachloromethane or 1,1,1-trichloroethane.

(2) No person shall manufacture or import any plastic foam product in which any CFC has been used as a foaming agent.

19. No person shall sell or offer for sale

(a) a pressurized container that contains 10 kg or less of any CFC; or

(b) a container or packaging material for food or beverages that is made of plastic foam in which any CFC has been used as a foaming agent.

20. (1) Subsection 18(1) does not apply in respect of

(a) a military vessel, boat, or craft before January 1, 2003; or

(b) fire extinguishing equipment that contains or is intended to contain any bromofluorocarbon and is for use in aircraft or military ships or vehicles if the equipment is imported from a Party.

(2) Subsection 18(1) does not apply in respect of aircraft, ships or any vehicle acquired before the coming into force of these Regulations.

(3) Section 18 does not apply in respect of a product imported in a consignment of personal or household effects and intended for the importer's personal use only.

(4) Subsection 18(1) and paragraph 19(a) do not apply in respect of a product that is an animal or human health care product, including any bronchial dilator, inhalable steroid, topical anaesthetic and veterinary powder wound spray.

(5) Subsection 18(1) and paragraph 19(a) do not apply in respect of a CFC or a product, as the case may be, that is contained in a container of 3 L or less and that is to be used for an essential use that is a laboratory or analytical use.

(6) Subsection 18(1) and paragraph 19(a) do not apply in respect of a CFC contained in a pressurized container where the CFC is

(a) in any of the following azeotropic mixtures, namely,

(b) a recovered CFC that is sold to be recycled or reclaimed and that will be used as a refrigerant.

21. (1) No person shall export to a Party operating under paragraph 1 of Article 5 of the Protocol, a product that contains or is intended to contain any CFC, bromofluorocarbon, tetrachloro-methane or 1,1,1-trichloroethane without a permit issued under paragraph 33(1)(e).

(2) Subsection (1) does not apply in respect of fire extinguishing equipment that is to be used in aircraft, military ships or vehicles.

Restrictions on HCFCs

22. No person shall manufacture, use, sell, offer for sale or import any HCFC or any product that contains or is intended to contain any HCFC if the HCFC or the product is for use in areas of application in which a controlled substance has never been used in Canada.

23. (1) On or after January 1, 1999, no person shall manufacture or import a pressurized container that contains 2 kg or less of any HCFC.

(2) On or after January 1, 2000, no person shall offer for sale or sell a pressurized container that contains 2 kg or less of any HCFC.

(3) Subsections (1) and (2) do not apply in respect of an HCFC or a product that is

(a) a mold release agent used in the production of plastic and elastomeric materials;

(b) a spinnerette lubricant or cleaning spray used in the production of synthetic fibers;

(c) a document preservation spray;

(d) fire extinguishing equipment used for non-residential applications;

(e) a wasp and hornet spray for use near power lines; or

(f) a foam insulation product.

(4) Subsections (1) and (2) do not apply in respect of a product that is an animal or human health care product, including any bronchial dilator, inhalable steroid, topical anaesthetic and veterinary powder wound spray.

(5) Subsections (1) and (2) do not apply in respect of an HCFC or a product that is to be used in a laboratory or for analysis.

24. (1) On or after January 1, 1999, no person shall manufacture or import any plastic foam product in which any HCFC has been used as a foaming agent.

(2) Subsection (1) does not apply to a product that is

(a) a foam insulation product; or

(b) a flexible polyurethane boardstock foam product.

25. On or after January 1, 2000, no person shall manufacture or import any flexible polyurethane boardstock foam product in which any HCFC has been used as a foaming agent.

26. (1) On or after January 1, 1999, no person shall manufacture or import for use in industrial cleaning HCFC-141b or any product that contains HCFC-141b.

(2) On or after January 1, 2000, no person shall

(a) use in industrial cleaning HCFC-141b or any product that contains HCFC-141b; or

(b) sell or offer for sale for use in industrial cleaning HCFC-141b or any product that contains HCFC-141b.

27. (1) On or after January 1, 2010 and until December 31, 2014, no person shall manufacture, use, sell, offer for sale or import HCFC-141b, HCFC-142b or HCFC-22.

(2) Subsection (1) does not apply in respect of the use of HCFC-141b, HCFC-142b or HCFC-22 as a refrigerant in a product manufactured before January 1, 2010.

(3) Subsection (1) does not apply in respect of the manufacture, sale, offer for sale or import of HCFC-141b, HCFC-142b or HCFC-22 for exportation or for use as a refrigerant in a product manufactured before January 1, 2010.

28. On or after January 1, 2010 and until December, 2019, no person shall manufacture or import any product that contains or is intended to contain HCFC-141b, HCFC-142b or HCFC-22.

29. (1) On or after January 1, 2015, no person shall manufacture, use, sell, offer for sale or import any HCFC.

(2) Subsection (1) does not apply in respect of the use of any HCFC, other than HCFC-141b, HCFC-142b and HCFC-22, as a refrigerant in a product manufactured before January 1, 2020.

(3) Subsection (1) does not apply in respect of the manufacture, sale, offer for sale or import of any HCFC, other than HCFC-141b, HCFC-142b and HCFC-22, for exportation or for use as a refrigerant in a product manufactured before January 1, 2020.

30. On or after January 1, 2020, no person shall manufacture or import any product that contains or is intended to contain any HCFC.

Permit Exempting from Part 2

31. Despite any provision of this Part, a person may manufacture, use, sell, offer for sale, import or export a controlled substance or a product that contains or is intended to contain a controlled substance, if the person has been issued a permit to do so under paragraph 33(1)(f) for a use that is essential to the protection of human life or health.

PART 3

ISSUANCE OF PERMITS

32. A person may apply to the Minister, in the form approved by the Minister, for

(a) a permit to import a recovered, recycled, reclaimed or already used controlled substance or a controlled substance for destruction, as referred to in subsection 5(1);

(b) a permit to export a controlled substance as referred to in section 6 or paragraph 7(2)(d) or (e);

(c) a permit to manufacture or import a controlled substance set out in column 2 of an item of Schedule 3 for a purpose set out in column 3 of that item, as referred to in paragraph 7(2)(c) or subsection 8(5);

(d) a permit to manufacture or import HCFCs, as referred to in paragraph 8(3)(b);

(e) a permit to export a product referred to in subsection 21(1); and

(f) a permit to manufacture, use, sell, offer for sale, import or export any controlled substance or product that contains or is intended to contain a controlled substance, as referred to in section 31.

33. (1) The Minister shall

(a) issue the permit referred to in paragraph 32(a) unless the application alleges that the controlled substance is recovered, recycled, reclaimed or already used, in which case the permit shall be issued if the applicant submits documentation in support of the allegation and if

(b) issue the permit referred to in paragraph 32(b) unless the application alleges that the controlled substance is recovered, recycled, reclaimed or already used, in which case the permit shall be issued if the applicant submits documentation in support of the allegation;

(c) issue the permit referred to in paragraph 32(c) if the applicant undertakes not to sell or otherwise supply any of the controlled substance to any person who has not completed a declaration in the form approved by the Minister;

(d) issue the permit referred to in paragraph 32(d), allowing a calculated level of consumption of HCFCs for an authorized sector that does not exceed, for a quarter within a year, the greater of 2t and 33% of the person's calculated level of consumption of HCFCs for that sector during the previous year, if the applicant has used all of their initial consumption allowance and any calculated level of consumption allowed under previous permits issued under this paragraph;

(e) issue the permit referred to in paragraph 32(e);

(f) issue the permit referred to in paragraph 32(f) if the applicant provides reasonable evidence that the use of the controlled substance or the product is essential to the protection of human life or human health.

(2) The Minister shall not issue a permit under this section if its issuance contravenes the Protocol or a Decision, as amended from time to time.

(3) The Minister may refuse to issue a permit if the Minister has reasonable grounds to believe that the applicant is not able to manufacture, use, sell, offer for sale, import or export a controlled substance or a product containing or intended to contain a controlled substance, as the case may be, in compliance with applicable Canadian law.

(4) The permit issued under this section shall expire at the end of the year in wich it is issued.

PART 4

MISCELLANEOUS PROVISIONS

Applications and Reports

34. (1) Any application for an adjustment, transfer or permit and any report submitted under these Regulations shall

(a) in the case of a corporation, be signed by an officer of the corporation authorized to do so;

(b) in any other case, be signed by the person making the application or submitting the report, or by a person authorized to act on behalf of that person; and

(c) contain the information set out in Schedule 5, as applicable, and, on request by the Minister, any other information that is reasonably necessary for the purposes of these Regulations.

(2) If a person who submits a report or an application referred to in subsection (1) requests that the information contained in it be treated as confidential under subsection 19(1) of the Act, the person shall include the reasons for that request.

35. The Minister may refuse to increase a consumption allowance under section 11 or to allow a transfer under section 12 if the Minister has reasonable grounds to believe that the applicant is not able to manufacture, use, sell, offer for sale, import or export the controlled substance or the product that contains or is intended to contain a controlled substance, as the case may be, in compliance with applicable Canadian law.

36. Any adjustment or transfer allowed under these Regulations shall expire at the end of the year in which it is granted.

Requirement to Provide Exact Information

37. No person shall provide the Minister with any false or misleading information or make a false or misleading declaration in purported compliance with these Regulations.

38. (1) The Minister may refuse to issue or may cancel a permit or authorization issued under these Regulations if any false or misleading information has been submitted in support of the application for the permit or authorization.

(2) The Minister shall not cancel a permit unless the Minister

(a) has provided the person with written reasons for the cancellation; and

(b) has given the person an opportunity to be heard, either by written or oral representations in respect of the cancellation.

TRANSITIONAL PROVISION

39. Any permit or authorization granted under the Ozone-depleting Substances Regulations and in effect on the day on which these Regulations come into force is cancelled, effective fifteen days after that day.

REPEALS

40. The Chlorofluorocarbon Regulations, 1989(see footnote 7) are repealed.

41. The Ozone-depleting Substances Regulations(see footnote 8) are repealed.

42. The Ozone-depleting Substances Products Regulations(see footnote 9) are repealed.

COMING INTO FORCE

43. These Regulations come into force on the date on which they are registered.

SCHEDULE 1
(Section 1)

PERCENTAGES FOR THE DETERMINATION OF CONSUMPTION ALLOWANCES

Item	Column 1 Group of Controlled Substances	Column 2 Year	Column 3 Percentage
1.	Group 8 Methyl bromide	(a) 1996 and 1997 (b) 1998 and each year after 1998	100% 75%
2.	Group 9 HCFCs	(a) 1996, 1997, 1998, 1999, 2000, 2001, 2002 and 2003	100%
		(b) 2004, 2005, 2006, 2007, 2008 and 2009	65%
		(c) 2010, 2011, 2012, 2013 and 2014	35%
		(d) 2015, 2016, 2017, 2018 and 2019	10%
		(e) 2020, 2021, 2022, 2023, 2024, 2025, 2026, 2027, 2028 and 2029	0.5%

SCHEDULE 2
(Section 1)

DATA FOR THE DETERMINATION OF CALCULATED LEVELS

Item	Column 1 Group of Controlled Substances	Column 2 Controlled Substance	Column 3 Ozone-depleting Potential
1.	1	Tetrachloromethane (carbon tetrachloride)	1.1
2.	2	1,1,1-trichloroethane (methyl chloroform), not including 1,1,2-trichloroethane	0.1
3.	3	Trichlorofluoromethane (CFC-11)	1.0
4.	3	Dichlorodifluoromethane (CFC-12)	1.0
5.	3	Trichlorotrifluoroethane (CFC-113)	0.8
6.	3	Dichlorotetrafluoroethane (CFC-114)	1.0
7.	3	Chloropentafluoroethane (CFC-115)	0.6
8.	4	Chlorofluorocarbons other than those set out in items 3 to 7	1.0
9.	5	Bromochlorodifluoromethane (Halon 1211)	3.0
10.	5	Bromotrifluoromethane (Halon 1301)	10.0
11.	5	Dibromotetrafluoroethane (Halon 2402)	6.0
12.	6	Bromofluorocarbons other than those set out in items 9 to 11	N/A
13.	7	Hydrobromofluorocarbons	Note 1
14.	8	Methyl bromide	0.6
15.	9	Hydrochlorofluorocarbons:
	9	(a) Dichlorofluoromethane (HCFC-21)	0.04
	9	(b) Chlorodifluoromethane (HCFC-22)	0.055
	9	(c) Chlorofluoromethane (HCFC-31)	0.02
	9	(d) Tetrachlorofluoroethane (HCFC-121)	0.04
	9	(e) Trichlorodifluoroethane (HCFC-122)	0.08
	9	(f) 2,2-dichloro-1,1,1-trifluoroethane (HCFC-123)	0.02
	9	(g) 1,2-dichloro-1,1,2-trifluoroethane (HCFC-123a)	0.06
	9	(h) 1,1-dichloro-1,2,2-trifluoroethane (HCFC-123b)	0.06
	9	(i) 2-chloro-1,1,1,2-tetrafluoroethane (HCFC-124)	0.022
	9	(j) 1-chloro-1,1,2,2-tetrafluoroethane (HCFC-124a)	0.04
	9	(k) Trichlorofluoroethane (HCFC-131)	0.05
	9	(l) Dichlorodifluoroethane (HCFC-132)	0.05
	9	(m) Chlorotrifluoroethane (HCFC-133)	0.06
	9	(n) Dichlorofluoroethane (HCFC-141), not including HCFC-141b	0.07
	9	(o) 1,1-dichloro-1-fluoroethane (HCFC-141b)	0.11
	9	(p) Chlorodifluoroethane (HCFC-142), not including HCFC-142b	0.07
	9	(q) 1-chloro-1,1-difluoroethane (HCFC-142b)	0.065
	9	(r) Chlorofluoroethane (HCFC-151)	0.005
	9	(s) Hexachlorofluoropropane (HCFC-221)	0.07
	9	(t) Pentachlorodifluoropropane (HCFC-222)	0.09
	9	(u) Tetrachlorotrifluoropropane (HCFC-223)	0.08
	9	(v) Trichlorotetrafluoropropane (HCFC-224)	0.09
	9	(w) Dichloropentafluoropropane (HCFC-225), not including HCFC-225ca and HCFC-225cb	0.07
	9	(x) 1,1-dichloro-2,2,3,3,3-pentafluoropropane (HCFC-225ca)	0.025
	9	(y) 1,3-dichloro-1,2,2,3,3-pentafluoropropane (HCFC-225cb)	0.033
	9	(z) Chlorohexafluoropropane (HCFC-226)	0.10
	9	(z.1) Pentachlorofluoropropane (HCFC-231)	0.09
	9	(z.2) Tetrachlorodifluoropropane (HCFC-232)	0.10
	9	(z.3) Trichlorotrifluoropropane (HCFC-233)	0.23
	9	(z.4) Dichlorotetrafluoropropane (HCFC-234)	0.28
	9	(z.5) Chloropentafluoropropane (HCFC-235)	0.52
	9	(z.6) Tetrachlorofluoropropane (HCFC-241)	0.09
	9	(z.7) Trichlorodifluoropropane (HCFC-242)	0.13
	9	(z.8) Dichlorotrifluoropropane (HCFC-243)	0.12
	9	(z.9) Chlorotetrafluoropropane (HCFC-244)	0.14
	9	(z.10) Trichlorofluoropropane (HCFC-251)	0.01
	9	(z.11) Dichlorodifluoropropane (HCFC-252)	0.04
	9	(z.12) Chlorotrifluoropropane (HCFC-253)	0.03
	9	(z.13) Dichlorofluoropropane (HCFC-261)	0.02
	9	(z.14) Chlorodifluoropropane (HCFC-262)	0.02
	9	(z.15) Chlorofluoropropane (HCFC-271)	0.03

Note 1: The ozone-depleting potential of each hydrobromofluorocarbon is the value indicated for it in Annex C of the Protocol or, where a range of values is indicated, the highest value in the range.

SCHEDULE 3
(Subsections 7(2) and 8(5), section 9, subsection 17(2) and section 32)

PURPOSES FOR WHICH MANUFACTURE AND IMPORT ARE ALLOWED UNDER A PERMIT

Item	Column 1 Group of Controlled Substances	Column 2 Controlled Substance	Column 3 Purpose
1.	1	Tetrachloromethane	(a) essential use (b) feedstock (c) analytical standard
2.	2	1,1,1-trichloroethane	(a) essential use (b) feedstock (c) analytical standard
3.	3, 4	Chlorofluorocarbons	(a) essential use (b) feedstock (c) analytical standard
4.	5, 6	Bromofluorocarbons	(a) essential use (b) analytical standard
5.	8	Methyl bromide	(a) quarantine application (b) pre-shipment application (c) feedstock (d) analytical standard
6.	9	Hydrochlorofluorocarbons	(a) feedstock (b) analytical standard

SCHEDULE 4
(Subsection 7(1))

DATE OF PROHIBITION

Item	Column I Group of Controlled Substances	Column 2 Date of Prohibition
1.	Group 1 Tetrachloromethane (carbon tetrachloride)	Jan. 1, 1995
2.	Group 2 1,1,1-trichloroethane (methyl chloroform)	Jan. 1, 1996
3.	Group 3 (1) Trichlorofluoromethane (CFC-11) (2) Dichlorodifluoromethane (CFC-12) (3) Trichlorotrifluoroethane (CFC-113) (4) Dichlorotetrafluoroethane (CFC-114) (5) Chloropentafluoroethane (CFC-115)	Jan. 1, 1996
4.	Group 4 Chlorofluorocarbons other than those set out in item 3	Jan. 1, 1996
5.	Group 5 (1) Bromochlorodifluoromethane (Halon 1211) (2) Bromotrifluoromethane (Halon 1301) (3) Dibromotetrafluoroethane (Halon 2402)	July 1, 1994
6.	Group 6 Bromofluorocarbons other than those set out in item 5	Jan. 1, 1994
7.	Group 7 Hydrobromofluorocarbons	Jan. 1, 1996
8.	Group 9 Hydrochlorofluorocarbons, not including 2,2-dichloro-1,1,1-trifluoroethane (HCFC-123)	Jan. 1, 2020
9.	2,2-dichloro-1,1,1-trifluoroethane (HCFC-123)	Jan. 1, 2030

SCHEDULE 5
(Subsections 16(1) and 34(1))

INFORMATION TO BE PROVIDED

1. Notice to give up consumption allowance:

(a) information respecting the applicant, namely,

2. Application for adjustment to consumption allowance:

(a) information respecting the applicant, namely,

(b) information respecting the controlled substance, namely,

3. Application for transfer of consumption allowance:

(a) information respecting transferor/transferee, namely,

(b) information respecting the controlled substance, namely,

4. Application for a permit to import or export a recovered, recycled, reclaimed or already used controlled substance or a controlled substance for destruction:

(a) information respecting the applicant, namely,

(b) information respecting the controlled substance, namely,

(c) information respecting reclamation or destruction facility, namely,

(d) information respecting the origin or destination, namely,

(e) information respecting the release of information to the Party of export or import.

5. Application for a permit to export a controlled substance other than a recovered, recycled, reclaimed or already used controlled substance or a controlled substance for destruction:

(a) information respecting applicant, namely,

(b) information respecting the controlled substance, namely,

(c) information respecting the destination, namely,

(d) information respecting the release of information to the Party of import.

6. Application for a permit to manufacture or import a controlled substance for a purpose set out in schedule 3:

(a) information respecting applicant, namely,

(b) information respecting the controlled substance, namely,

(c) information respecting the country of origin; and

(d) information respecting the recipient of the controlled substance, namely,

7. Declaration for use for a purpose set out in Schedule 3:

(a) the name and address of the vendor and supplier;

(b) information respecting the recipient, namely,

(c) information respecting the controlled substance, namely

(d) information respecting clients, namely,

8. Application for a permit to manufacture or import HCFCs:

(a) information respecting applicant, namely,

(b) information respecting the controlled substance, namely,

9. Application for a permit to export a product that contains or is intended to contain CFCs, bromofluorocarbons, tetrachloromethane or 1,1,1-trichloroethane

(a) information respecting applicant, namely,

(b) information respecting the product, namely,

(c) information respecting the destination, namely

(d) information respecting the release of information to the Party of import.

10. Application for a permit to manufacture, use, sell, offer for sale, import or export a controlled substance or a product for a use that is essential for the protection of human life or human health:

(a) information respecting applicant, namely,

(b) information respecting the controlled substance or product, namely,

11. Annual report (controlled substances other than recovered, recycled, reclaimed or already used controlled substances):

(a) information respecting person submitting the report, namely,

(b) information respecting the controlled substance, namely,

(c) information respecting destruction facility, namely,

(d) name and address of the facility where the controlled substance is used as feedstock;

(e) information respecting imports or exports, namely,

(f) the name and address of the recipient of the controlled substance.

12. Annual or quarterly report (recovered, recycled, reclaimed or already used controlled substances)

(a) information respecting person submitting the report, namely,

(b) information respecting the controlled substance, namely,

(c) information respecting destruction facility, namely,

(d) the name and address of the facility where the controlled substance is used as feedstock; and

(e) information respecting imports or exports, namely,

SCHEDULE 6
(Section 17)

INFORMATION TO BE MAINTAINED

Information respecting manufacture

1. Dated records of

(a) the actual quantity of each controlled substance manufactured at each manufacturing plant and that quantity expressed as a calculated level;

(b) the actual quantity of each controlled substance used as feedstock, the other chemical substances manufactured, and that quantity expressed as a calculated level;

(c) the actual quantity of each controlled substance shipped from each manufacturing plant, the name and address of the recipient of each shipment, and that quantity expressed as a calculated level; and

(d) the actual quantity of each controlled substance recovered for reclamation at each manufacturing plant and that quantity expressed as a calculated level, the name and address of the individual or company from which the controlled substance is recovered, and, if different, the name and address of the site from which the controlled substance is recovered.

Information respecting the use, sale and offer for sale

2. Dated records of

(a) the actual quantity of each controlled substance purchased from Canadian suppliers, that quantity expressed as a calculated level, and the names and addresses of the Canadian suppliers;

(b) the actual quantity of each controlled substance used, that quantity expressed as a calculated level, and the use; and

(c) the actual quantity of each controlled substance sold or otherwise supplied, that quantity expressed as a calculated level, the names and addresses of the customers and the declarations referred to in clause 7(2)(b)(ii)(B) and paragraph 33(1)(c).

Information respecting import

3. (1) Dated records of

(a) the actual quantity of each controlled substance imported in each shipment, that quantity expressed as a calculated level, and whether it is a quantity of a recovered, recycled, reclaimed or already used controlled substance;

(b) where the controlled substance is shipped to another destination in Canada, the actual quantity of each controlled substance shipped, the name and address of the recipient of each shipment, and that quantity expressed as a calculated level;

(c) the port of entry through which the controlled substance was imported;

(d) the Party from which the controlled substance was imported and the name and address of the sender (individual or company);

(e) the Harmonized Commodity Description and Coding System classification number for the controlled substance imported; and

(f) the importer number for the shipment of the controlled substance imported.

(2) Copies of the bill of lading, the invoice and all documents submitted to the Department of National Revenue for each shipment of a controlled substance.

Information respecting export

4. Dated records of

(a) the actual quantity of each controlled substance exported in each shipment, that quantity expressed as a calculated level and whether it is a quantity of a recovered, recycled, reclaimed or already used controlled substance;

(b) the port of exit through which the controlled substance was exported;

(c) the Party to which the controlled substance was exported and the name and address of the recipient (individual or company); and

(d) the Harmonized Commodity Description and Coding System classification number for the controlled substance exported.

[35-1-o]

Footnote 1

The Parties to the Montreal Protocol have agreed to grant, following elimination, possible exemptions for "essential uses", which are to be identified at the international level on the basis of essential-use criteria adopted by the Parties. Canada will consider these exemptions on a case-by-case basis.

Footnote 2

The Parties to the Montreal Protocol have agreed to grant, following elimination, possible exemptions for "essential uses", which are to be identified at the international level on the basis of essential-use criteria adopted by the Parties. Canada will consider these exemptions on a case-by-case basis.

Footnote 3

The Parties to the Montreal Protocol have agreed to grant, following elimination, possible exemptions for "essential uses", which are to be identified at the international level on the basis of essential-use criteria adopted by the Parties. Canada will consider these exemptions on a case-by-case basis.

Footnote 4

The Parties to the Montreal Protocol have agreed to grant, following elimination, possible exemptions for "essential uses", which are to be identified at the international level on the basis of essential-use criteria adopted by the Parties. Canada will consider these exemptions on a case-by-case basis.

Footnote 5

The Parties to the Montreal Protocol have agreed to grant, following elimination, possible exemptions for "essential uses", which are to be identified at the international level on the basis of essential-use criteria adopted by the Parties. Canada will consider these exemptions on a case-by-case basis.

Footnote 6

Under the Montreal Protocol, up to 0.5 percent of the consumption for service of refrigeration and air-conditioning equipment is allowed only until 2030.

Footnote a

R.S., 1985, c. 16 (4th Supp.)

Footnote b

S.C., 1992, c. 1, s. 144 (Sch. VII, s. 15)

Footnote 7

SOR/90-127

Footnote 8

SOR/95-576

Footnote 9

SOR/95-584

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