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Vol. 134, No. 32 — August 5, 2000

Regulations Amending the Agricultural Marketing Programs Regulations

Statutory Authority

Agricultural Marketing Programs Act

Sponsoring Department

Department of Agriculture and Agri-Food

REGULATORY IMPACT ANALYSIS STATEMENT

Description

In June 1999, the Agricultural Marketing Programs Act was amended to provide a direct government guarantee to lenders loaning money to producer organizations (administrators) to finance the Advance Payments Program. As a result of the amendment to the legislation, the Regulations are being amended to specify the conditions that must be met for a lender to request payment under the guarantee.

This amendment was included in the Budget Bill to ensure that financing would be available from the lenders for the 1999-2000 crop year. There was some reluctance to provide financing in the previous crop year due to the lack of a direct guarantee. The content of the regulations has been discussed with the lenders and they are comfortable with the requirements.

Under the Advance Payment Program, producer organizations use a government guarantee to secure loans to make cash advances to producers at harvest. Should a producer fail to repay the advance, the Government pays the lender the Government's liability for the advance under the guarantee agreement. The producer's debt then becomes due to the Crown.

Lenders had raised concern with the guarantee provisions of the legislation as they were conditional on the administrators' performance under the guarantee agreement. With the increased security of the direct guarantee, the lenders will continue to provide funding for the program at preferential interest rates.

The regulation anticipates that, under most circumstances, the administrator will continue to make the request for payment on the guarantee as it has in the past. As the administrator deals directly with the producers, it is in the best position to provide information to the Government on the default. The amendments to the regulation will allow the lender to request payment on the guarantee where the administrator fails to make the request for payment.

Under the proposed amended regulation, the lender will have to allow the administrator ten months in which to make a request for payment under the government guarantee. The ten months given to the administrator by the lenders is to allow the administrator time to work the account for collection purposes. When the lenders make a request to the Government, they must state that they contacted the administrator to request payment and that the administrator failed to comply. In addition, the lender will be required to supply the name, address of the producer who did not repay the advance and the amount owed. This information will allow the Government to continue collection action.

The Regulations will take effect as soon as final approval is received.

Alternatives

Regulatory alternatives were considered during the consultation process on the legislation with the lenders and administrators, and it was determined that the conditions of payment were best managed in regulations. The specific provision of this regulation was deemed to be the most appropriate for program delivery.

Benefits and Costs

This amendment to the Regulations will ensure that lenders continue to provide timely financing to the administrators for the advances needed by producers and that the best financing rates are obtained. As the Government pays the interest on the first $50,000 of advances issued to each producer and guarantees the interest payments on defaults up to $250,000, the financing rates directly affect the cost of the program.

As the administrators traditionally met their obligations under the guarantee agreement, no additional cost to Government under the guarantee provisions is expected. The conditions for payment in the Regulations will ensure that the administrators have sufficient time to do collection work before a request for payment is made and the debt is turned over to the Crown. In addition, where a request is made by the lender, the Government will have sufficient information to continue collection action on the debt.

This provision will not increase the rate of defaults at the producer organization (administrator) level or the amount of defaults under the legislation.

Consultation

The proposed amendment has been discussed with the Canadian Bankers Association and has been circulated to the administrators for comment. The lenders and the organizations support this amendment as the security to the lender is increased and time is being given to work the accounts which should reduce defaults thereby ensuring the continuity of the program.

Compliance and Enforcement

Lenders will be required to comply with the amended Regulations before payment on any guarantee is made.

Contact

Rosser Lloyd, National Marketing Programs, Market and Industry Services Branch, Agriculture and Agri-Food Canada, 2200 Walkley Road, Ottawa, Ontario K1A 0C5, (613) 759-6303 (Telephone), (613) 759-6315 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to section 40 (see footnote a) of the Agricultural Marketing Programs Act(see footnote b), proposes to make the annexed Regulations Amending the Agricultural Marketing Programs Regulations.

Interested persons may make representations with respect to the proposed Regulations within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Rosser Lloyd, Advance Payments Program Manager, Agriculture and Agri-Food Canada, 2200 Walkley Road, Ottawa, Ontario, K1A 0C5.

Ottawa, July 27, 2000.

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE AGRICULTURAL MARKETING PROGRAMS REGULATIONS

AMENDMENT

1. Section 7 of the Agricultural Marketing Programs Regulations(see footnote 1) is renumbered as subsection 7(1) and is amended by adding the following:

(2) Despite paragraph (1)(a), payment under subsection 23(1) of the Act may be made to a lender if

(a) the administrator has not made a request in writing to the Minister for payment within 10 months after the end of the crop year specified in the advance guarantee agreement;

(b) after the 10 month-period referred to in paragraph (a), the lender has submitted a letter to the administrator asking that the administrator request in writing payment from the Minister as specified in the advance guarantee agreement;

(c) the administrator has failed to comply with the request referred to in paragraph (b) within 10 days after the date on which the letter was sent; and

(d) the lender submits a request in writing to the Minister for payment

(i) stating that the lender has written to the administrator asking that the administrator request in writing payment from the Minister and that the administrator has failed to comply within 10 days after the date on which the letter was sent,
(ii) providing the Minister with a copy of the letter to the administrator, and
(iii) specifying the name and address of the producer in default and the amount of the default.

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

[32-1-o]

Regulations Amending the Federal Authorities Regulations

Statutory Authority

Canadian Environmental Assessment Act

Sponsoring Agency

Canadian Environmental Assessment Agency

REGULATORY IMPACT ANALYSIS STATEMENT

Description

The 1995 Canadian Environmental Assessment Act (the Act) requires federal authorities to conduct environmental assessments (EAs) before initiating or funding projects, disposing of lands or any interest therein for the purpose of allowing a project to be carried out, or issuing certain regulatory permits for projects.

The Federal Authorities Regulations (the Regulations) came into force on May 28, 1996, and prescribe the Canada-Newfoundland Offshore Petroleum Board as a federal authority under the Act. The Canada-Newfoundland Offshore Petroleum Board (CNOPB) was established pursuant to federal and provincial legislation to manage oil and gas activities in the Newfoundland offshore area on behalf of the federal and provincial governments. These management responsibilities involve the issuance of oil and gas interests from lands in the offshore area that are federal lands as contemplated in paragraph 5(1)(c) of the Act. As a consequence of the Regulations and pursuant to paragraph 5(1)(c) of the Act, the Canada-Newfoundland Offshore Petroleum Board is required to carry out an EA under the Act prior to issuing any interest in land, that is federal land as contemplated in paragraph 5(1)(c) of the Act, that would allow a project to take place. This includes interests in land that would allow for the extraction of oil and gas from the Newfoundland offshore region.

The Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) was established pursuant to federal and provincial legislation to manage oil and gas activities in the Nova Scotia offshore area on behalf of the federal and provincial governments. These management responsibilities involve the issuance of oil and gas interests from lands in the offshore area that are federal lands as contemplated in paragraph 5(1)(c) of the Act.

The proposed amendment to the Regulations would prescribe the CNSOPB as a federal authority. If the amendment is approved, the CNSOPB will henceforth be required, pursuant to paragraph 5(1)(c) of the Act, to carry out an EA under the Act prior to issuing any interest in land, that is federal land as contemplated in paragraph 5(1)(c) of the Act, that allows a project to take place. This includes interests in land that would allow for the extraction of oil and gas from the Nova Scotia offshore region.

Alternatives

There exist two possible alternatives to the amendment of the Regulations: guidelines or the status quo.

A. Guidelines

The CNSOPB's application of the Act's EA regime to the Nova Scotia offshore will provide needed consistency and clarity to the EA requirements of the two Offshore Boards. EA guidelines for the CNSOPB would not be legally binding and would therefore not fulfill the aforementioned objectives. These objectives can only be achieved if the Regulations are amended to make the CNSOPB a federal authority.

B. Status Quo

The status quo, in which the CNSOPB continues to carry out EAs according to its internal EA policy and procedures is the second alternative. Under this alternative, the consistency and clarity of one environmental assessment regime for the two Offshore Boards would not be obtained.

Benefits and Costs

The proposed amendment to the Regulations would result in added costs to the CNSOPB if the EAs conducted pursuant to the Act are more demanding than the assessments that otherwise would have been conducted by the CNSOPB. However, the budget of the CNSOPB is shared by the federal Department of Natural Resources and the Nova Scotia Petroleum Directorate, both of whom have indicated that such additional costs would be acceptable.

The proposed amendment would allow for a consistent environmental assessment regime for oil and gas projects under the purview of the Canada-Nova Scotia Offshore Petroleum Board and the Canada-Newfoundland Offshore Petroleum Board.

Also, in clarifying the status of the CNSOPB as a federal authority, the proposed amendment would eliminate the possibility of any litigation (and the associated legal costs) over the status of the CNSOPB under the Act.

Consultation

The multi-stakeholder Regulatory Advisory Committee (RAC) chaired by the Canadian Environmental Assessment Agency (the Agency), has participated in the development of this amendment to the Regulations and has no objections.

The Nova Scotia Petroleum Directorate also has no objections to this amendment.

Compliance and Enforcement

The Act empowers the Minister of the Environment to provide education to the Offshore Boards and other groups to enable them to discharge their responsibilities under the Act and its Regulations. Compliance with the proposed amendment to the Regulations will be promoted in three ways. First, the Agency will offer to train the CNSOPB so that it can comply with the requirements of the Act and its Regulations. Second, the Agency's monitoring program will assess whether the CNSOPB has any specific problems in adhering to the Act and its Regulations. If required, the Agency will provide technical advice to the CNSOPB to assist in the discharge of its duties under the Act and its Regulations. Third, the Agency's Regional Office will help departments and the CNSOPB to exchange information about specific EAs, thereby assisting them in complying with their EA responsibilities under the Act and its Regulations.

Contact

Ian Ferguson, (819) 997-2217.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to paragraph 59(e) of the Canadian Environmental Assessment Act(see footnote c), proposes to make the annexed Regulations Amending the Federal Authorities Regulations.

Interested persons may make representations with respect to the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Peter Sherhols, Director, Policy Analysis, Canadian Environmental Assessment Agency, 14^th Floor, Fontaine Building, 200 Sacre-Cœur Boulevard, Hull, Quebec, K1A 0H3.

Ottawa, July 27, 2000.

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

REGULATIONS AMENDING THE FEDERAL AUTHORITIES REGULATIONS

AMENDMENT

1. The schedule to the Federal Authorities Regulations(see footnote 2) is amended by adding the following after item 1:

2. Canada-Nova Scotia Offshore Petroleum Board established by the joint operation of the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation (Nova Scotia) Act, Chapter 3 of the Statutes of Nova Scotia, 1987.

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

[32-1-o]

Regulations Amending the New Substances Notification Regulations

Statutory Authority

Canadian Environmental Protection Act, 1999

Sponsoring Department

Department of the Environment

REGULATORY IMPACT ANALYSIS STATEMENT

Description

On April 6, 1994, the New Substances Notification Regulations (NSN Regulations) were promulgated under sections 32 and 87 of the Canadian Environmental Protection Act, 1988 (CEPA 88) [which correspond to subsections 89(1) and 332(1) of CEPA 99]. The purpose of these Regulations is to ensure that no new substances will be manufactured or imported into Canada on a commercial scale before an assessment has been carried out to determine the risk posed to the environment and human health by the substance.

Schedule IX of the NSN Regulations describes the types of polymers that may represent a greater risk for the environment or human health. Therefore, the NSN Regulations require that more information be provided to the Department for these polymers. Schedule X provides a list of reactants that lead to the manufacture of polymers of low concern for which regulatory information requirements are less onerous. Therefore, both schedules assist Canadian companies to determine the information they must provide under the Regulations in regard of the type of polymer that they import or manufacture in Canada.

The main purpose of the amendments to Schedule IX (Type of Polymers) of the New Substances Notification Regulations is to enhance its content readability and understanding. Therefore, except for some sentence rewording and the insertion of additional precision in some places, the content of the original text is respected.

Schedule X was developed based on the U.S. Toxic Substances Control Act (TSCA) inventory and notices submitted under section 5 of that Act. The purpose of the amendments to Schedule X (List of reactants and their Chemical Abstracts Service registry number) is to update the list of reactants. The List is not a static list and as agreed during the initial consultations on the Regulations, is subject from time to time to additions, deletions and/or corrections that are published in the Canada Gazette. Therefore, the proposed amendments will keep up with the objectives of consistency and will ensure better harmonization with the United States.

Alternatives

As the amendments seek to provide a better clarification and were agreed to through the consultation process, no other alternatives to these changes were considered.

Benefits and Costs

Benefits

The benefits associated with these amendments include greater clarity in the interpretation of the Regulations. They will also ensure, as per the consultations, consistency with respect to substances exempted, between the New Substances Notification Regulations and the U.S. EPA Premanufacture Notification Regulations. This harmonized approach will ensure that the competitiveness of Canadian industry will not be negatively affected by the changes made in the U.S. regulations.

Costs

The amendments will not result in any incremental costs to industry, governments or the Canadian public.

Consultation

Consultations were held with the Canadian Environmental Protection Act Industry Coordinating Group (CEPA ICG) from 1995 to 1997. The CEPA ICG is a group of associations which represents over 800 Canadian companies that produce or use chemical substances in Canada, all of which are affected by the requirements associated with the new substances program in Canada. In February 1997, the CEPA ICG informed the Department in writing that they agreed with the proposed amendments to Schedules IX and X and underscored the importance for Canadian companies of a better harmonization with the U.S. Toxic Substances Control Act (TSCA) inventory.

Compliance and Enforcement

Since the Regulations are made under the Canadian Environmental Protection Act, 1999, the Enforcement and Compliance Policy implemented under the Act will be applied by CEPA enforcement officers. The policy outlines, among other things, measures to promote compliance, including education and information, promotion of technology development and consultations on regulation development.

When verifying compliance with these Regulations, CEPA inspectors will abide by the Enforcement and Compliance Policy, which sets out a range of possible responses to violations: warnings, ticketing, ministerial orders, injunctions, prosecution and a civil suit by the Crown to recover costs in specified circumstances. If, during inspections or by means of the reporting of suspected violations, a CEPA inspector confirms an offence, the inspector will choose the appropriate response, based on: nature of the violation, effectiveness in achieving the desired result with the violator, and consistency in application.

Contacts

Josée Lavergne, Commercial Chemicals Evaluation Branch, Toxics Pollution Prevention Directorate, Environmental Protection Service, Department of the Environment, Ottawa, Ontario K1A 0H3, (819) 953-1651 (Telephone), (819) 953-4936 (Facsimile); or Arthur Sheffield, Regulatory and Economic Analysis Branch, Economic and Regulatory Affairs Directorate, Policy and Communications, Department of the Environment, Ottawa, Ontario K1A 0H3, (819) 953-1172 (Telephone), (819) 997-2769 (Facsimile).

PROPOSED REGULATORY TEXT

Notice is hereby given, pursuant to subsection 332(1) of the Canadian Environmental Protection Act, 1999(see footnote d), that the Governor in Council proposes, pursuant to subsection 89(1) of that Act, to make the annexed Regulations Amending the New Substances Notification Regulations.

Any person may, within 60 days after the publication of this notice, file with the Minister of the Environment comments with respect to the proposed Regulations or a notice of objection requesting that a board of review be established under section 333 of the Canadian Environmental Protection Act, 1999(see footnote e) and stating the reasons for the objection. All comments and notices must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Cynthia Wright, Director General, Strategic Priorities Directorate, Environmental Protection Service, Department of the Environment, Ottawa, Ontario K1A 0H3.

The comments and reasons for the objection should stipulate those parts thereof that should not be disclosed pursuant to the Access to Information Act and, in particular, pursuant to sections 19 and 20 of that Act, the reason why those parts should not be disclosed and the period during which they should remain undisclosed. The comments and reasons for the objection should also stipulate those parts thereof for which there is consent to disclosure pursuant to the Access to Information Act.

Ottawa, July 27, 2000

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

[32-1-o]

REGULATIONS AMENDING THE NEW SUBSTANCES NOTIFICATION REGULATIONS

AMENDMENT

1. Schedules IX and X to the New Substances Notification Regulations(see footnote 3) are replaced by the following:

SCHEDULE IX
(Paragraphs 19(1)(a) and (b))

TYPES OF POLYMERS

1. A cationic polymer or a polymer that is reasonably expected to become cationic in a natural aquatic environment, except

(a) a polymer that has a combined equivalent weight for the cationic group in the polymer greater than 5,000; or

(b) a polymer that is a solid material, that is not soluble or dispersible in water and that will be used only in the solid phase, such as polymers that can be used as ion exchange beads.

2. A polymer that is designed, or can be expected, to substantially degrade, decompose or depolymerize, including polymers that could substantially decompose after manufacture and use, even though they are not actually intended to do so. Degradation, decomposition or depolymerization mean the types of chemical changes that convert a polymeric substance into simpler, smaller substances, through processes including but not limited to oxidation, hydrolysis, attack by solvents, heat, light or microbial action.

3. A polymer that contains as an integral part of its composition only one or none of the following atomic elements: carbon, hydrogen, nitrogen, oxygen, silicon and sulphur.

4. A polymer that contains

(a) any atomic elements other than carbon, hydrogen, nitrogen, oxygen, silicon, sulphur, fluorine, chlorine, bromine or iodine covalently bound to carbon;

(b) any monoatomic counterions other than chlorine ion, bromine ion, iodine ion, sodium ion, divalent magnesium, trivalent aluminum, potassium ion or divalent calcium; and

(c) 0.2% or more by weight of any atomic element or combination of the following atomic elements: lithium, boron, phophorus, titanium, manganese, iron, nickel, copper, zinc, tin or zirconium.

5. A polymer

(a) that contains reactive functional groups other than carboxylic acid groups, aliphatic hydroxyl groups, unconjugated olefinic groups that are considered "ordinary"(see footnote f), butenedioic acid groups, blocked isocyanates including ketoxime-blocked isocyanates, thiols, unconjugated nitrile groups, halogens excluding reactive halogen-containing groups such as benzylic or allylic halides, and conjugated olefinic groups contained in naturally occurring fats, oils and carboxylic acids, in combined equivalent weights of less than 5,000; or

(b) in which the only reactive functional groups present are part of acid halides, acid anhydrides, aldehydes, hemiacetals, methylol-amides, methylol-amines, methylol-ureas, alkoxysilanes with alkoxy greater than C₂-alkoxysilanes, allyl ethers, conjugated olefins, cyanates, epoxides, imines, unsubstituted positions ortho or para to phenolic hydroxyl, in combined equivalent weights of less than 1,000.

SCHEDULE X
(Paragraph 19(1)(c))

LIST OF REACTANTS AND THEIR CHEMICAL ABSTRACTS SERVICE REGISTRY NUMBER

Monobasic Acids and Natural Oils

Benzoic acid (65-85-0)

Canola oil (120962-03-0 (see footnote g))

Coconut oil (8001-31-8 (see footnote h))

Corn oil (8001-30-7 (see footnote i))

Cottonseed oil (8001-29-4 (see footnote j))

Dodecanoic acid (143-07-7)

Fatty acids, C_16-18 and C₁₈-unsaturated (67701-08-0 (see footnote k))

Fatty acids, castor oil (61789-44-4 (see footnote l))

Fatty acids, coco (61788-47-4 (see footnote m))

Fatty acids, dehydrated castor oil (61789-45-5 (see footnote n))

Fatty acids, linseed oil (68424-45-3 (see footnote o))

Fatty acids, safflower oil (93165-34-5 (see footnote p))

Fatty acids, soybean oil (68308-53-2 (see footnote q))

Fatty acids, sunflower oil (84625-38-7 (see footnote r))

Fatty acids, sunflower oil, conjugated (68953-27-5 (see footnote s))

Fatty acids, tall-oil (61790-12-3 (see footnote t))

Fatty acids, tall-oil, conjugated (see footnote u)

Fatty acids, vegetable oil (61788-66-7 (see footnote v))

Glycerides, C_16-18 and C₁₈-unsaturated (67701-30-8 (see footnote w))

Heptanoic acid (111-14-8)

Hexanoic acid (142-62-1)

Hexanoic acid, 3,3,5-trimethyl- (3302-10-1)

Linseed oil (8001-26-1 (see footnote x))

Linseed oil, oxidized (68649-95-6 (see footnote y))

Nonanoic acid (112-05-0)

Oils, anchovy (128952-11-4 (see footnote z))

Oils, babassu palm (91078-92-1 (see footnote 1a))

Oils, cannabis (see footnote 1b)

Oils, herring (68153-06-0 (see footnote 1c))

Oils, menhaden (8002-50-4 (see footnote 1d))

Oils, oiticica (8016-35-1 (see footnote 1e))

Oils, palm kernel (8023-79-8 (see footnote 1f))

Oils, perilla (68132-21-8 (see footnote 1g))

Oils, sardine (93334-41-9 (see footnote 1h))

Oils, walnut (8024-09-7 (see footnote 1i))

Safflower oil (8001-23-8 (see footnote 1j))

Soybean oil (8001-22-7 (see footnote 1k))

Sunflower oil (8001-21-6 (see footnote 1l))

Tung oil (8001-20-5 (see footnote 1m))

Dibasic and Tribasic Acids and Esters

1,2-Benzenedicarboxylic acid (88-99-3)

1,3-Benzenedicarboxylic acid (121-91-5)

1,3-Benzenedicarboxylic acid, dimethyl ester (1459-93-4)

1,4-Benzenedicarboxylic acid (100-21-0)

1,4-Benzenedicarboxylic acid, diethyl ester (636-09-9)

1,4-Benzenedicarboxylic acid, dimethyl ester (120-61-6)

1,2,4-Benzenetricarboxylic acid (528-44-9)

Butanedioic acid (110-15-6)

Butanedioic acid, diethyl ester (123-25-1)

Butanedioic acid, dimethyl ester (106-65-0)

2-Butenedioic acid (E) (110-17-8)

Decanedioic acid (111-20-6)

Decanedioic acid, diethyl ester (110-40-7)

Decanedioic acid, dimethyl ester (106-79-6)

Dodecanedioic acid (693-23-2)

Fatty acids, C₁₈-unsaturated, dimers (61788-89-4 (see footnote 1n))

Heptanedioic acid (111-16-0)

Heptanedioic acid, dimethyl ester (1732-08-7)

Hexanedioic acid (124-04-9)

Hexanedioic acid, diethyl ester (141-28-6)

Hexanedioic acid, dimethyl ester (627-93-0)

Nonanedioic acid (123-99-9)

Nonanedioic acid, diethyl ester (624-17-9)

Nonanedioic acid, dimethyl ester (1732-10-1)

Octanedioic acid (505-48-6)

Octanedioic acid, dimethyl ester (1732-09-8)

Pentanedioic acid (110-94-1)

Pentanedioic acid, diethyl ester (818-38-2)

Pentanedioic acid, dimethyl ester (1119-40-0)

Undecanedioic acid (1852-04-6)

Polyols

1,3-Butanediol (107-88-0)

1,4-Butanediol (110-63-4)

1,4-Cyclohexanedimethanol (105-08-8)

1,2-Ethanediol (107-21-1)

Ethanol, 2,2'-oxybis- (111-46-6)

1,6-Hexanediol (629-11-8)

1,3-Pentanediol, 2,2,4-trimethyl- (144-19-4)

1,2-Propanediol (57-55-6)

1,3-Propanediol, 2,2-bis(hydroxymethyl)- (115-77-5)

1,3-Propanediol, 2,2-dimethyl- (126-30-7)

1,3-Propanediol, 2-ethyl-2-(hydroxymethyl)- (77-99-6)

1,3-Propanediol, 2-(hydroxymethyl)-2-methyl- (77-85-0)

1,3-Propanediol, 2-methyl- (2163-42-0)

1,2,3-Propanetriol (56-81-5)

1,2,3-Propanetriol, homopolymer (25618-55-7)

2-Propen-1-ol, polymer with ethenylbenzene (25119-62-4)

Modifiers

Acetic acid, 2,2'-oxybis- (110-99-6)

1-Butanol (71-36-3)(see footnote 1o)

Cyclohexanol (108-93-0)

Cyclohexanol, 4,4'-(1-methylethylidene)bis- (80-04-6)

Ethanol, 2-(2-butoxyethoxy)- (112-34-5)

1-Hexanol (111-27-3)

Methanol, hydrolysis products with trichlorohexylsilane and trichlorophenylsilane (72318-84-4 (see footnote 1p))

1-Phenanthrenemethanol, tetradecahydro-1, 4-a-dimethyl-7-(1-methylethyl)-(13393-93-6)

Phenol, 4,4'-(1-methylethylidene)bis- , polymer with 2,2'-[(1-methylethylidene)bis(4,1-phenyleneoxymethylene)]bis[oxirane] (25036-25-3)

Siloxanes and silicones, dimethyl, diphenyl, polymers with phenyl silsesquioxanes, methoxy-terminated (68440-65-3 (see footnote 1q))

Siloxanes and silicones, dimethyl, methoxy phenyl, polymers with phenyl silsesquioxanes, methoxy-terminated (68957-04-0 (see footnote 1r))

Siloxanes and silicones, methyl phenyl, methoxy phenyl, polymers with phenyl silsesquioxanes, methoxy- and phenyl-terminated (68957-06-2 (see footnote 1s))

Silsesquioxanes, phenyl propyl (68037-90-1 (see footnote 1t))

COMING INTO FORCE

2. These Regulations come into force on the day on which they are registered.

[32-1-o]

Order Amending the Motor Vehicles Tariff Order, 1998

Statutory Authority

Customs Tariff

Sponsoring Department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

Description

In February 1999, a Panel was established by the World Trade Organization (WTO) to examine complaints filed against Canada by Japan and the European Communities (EC) claiming that measures implementing the Canada-United States Automotive Trade Agreement of 1965 (the Auto Pact) are inconsistent with Canada's obligations under the General Agreement on Tariffs and Trade 1994 (the GATT), the Agreement on Subsidies and Countervailing Measures (the SCM Agreement) and the General Agreement on Trade in Services (the GATS).

The Auto Pact is implemented in Canada through the Motor Vehicles Tariff Order, 1998 (MVTO) and a number of Special Remission Orders (SROs). Under these measures, qualified vehicle manufacturers are able to import new vehicles (cars, trucks and buses) duty-free from any Most-Favoured-Nation (MFN) country, provided certain performance requirements based on production-to-sales ratios (i.e. the ratio of the net sales value of the vehicles produced to the net sales value of all vehicles sold for consumption in Canada) and Canadian value-added (i.e. Canadian labour costs, administrative and general expenses incurred in Canada, the cost of parts produced in Canada) are met.

The complaints filed by Japan and the EC focused on the right of qualifying Auto Pact manufacturers to import vehicles duty-free while non-qualifying vehicle manufacturers in Canada are required to pay the 6.1 percent MFN tariff on all vehicles that they import from offshore.

On February 11, 2000, the WTO Panel ruled that the Auto Pact measures were, in fact, in violation of Canada's WTO obligations under the GATT, the SCM Agreement and the GATS.

In March 2000, Canada filed a submission with the WTO Appellate Body in which it appealed certain of the Panel's findings. Japan and the EC also filed appeals. The Appellate Body released its Report on May 31, 2000. It ruled that key elements of the Auto Pact measures, namely the duty waiver and the Canadian-value-added and ratio requirements, are in violation of Canada's WTO obligations under the GATT, the SCM Agreement and the GATS.

On June 19, 2000, the Appellate Body Report and the Panel Report, as amended, were adopted by the WTO Dispute Settlement Body (DSB). The DSB also recommended that Canada withdraw the measures found to be inconsistent with the SCM Agreement (namely the production-to-sales ratio requirements) within 90 days (i.e. by September 17, 2000). On July 19, 2000, pursuant to WTO requirements, Canada informed the DSB that it will honour its international obligations and comply with the DSB recommendations and rulings.

Accordingly, the Government proposes to amend the Auto Pact measures to eliminate the requirement to meet production-to-sales ratios in order to qualify for the duty waiver. The Order Amending the Motor Vehicles Tariff Order, 1998 removes the references to the production-to-sales ratio from the MVTO, and the Order Amending Certain Remission Orders made under the Financial Administration Act (2000-1) and the Order Amending Certain Remission Orders made under the Financial Administration Act(2000-2) remove the references to the ratio from the SROs. These Orders would come into force on September 17, 2000.

The other findings of the Panel and the Appellate Body relevant to the duty waiver and the Canadian value-added will be implemented within a reasonable period of time in accordance with WTO rules. In the meantime, the Government will continue consultations with stakeholders and the provinces to determine how and when Canada will implement those findings.

Alternatives

The introduction of Orders in Council pursuant to subsection 14(2) and section 16 of the Customs Tariff and subsection 23(2) of the Financial Administration Act to amend, respectively, the MVTO and the SROs to remove the references to the production-to-sales ratio is the only alternative in this case.

Benefits and Costs

The removal of the production-to-sales ratio requirements from the MVTO and the SROs will not have any adverse impact on the ability of Auto Pact members to import vehicles duty-free.

Consultation

Officials of the Departments of Finance, Industry and Foreign Affairs and International Trade, and of the Canada Customs and Revenue Agency have consulted with stakeholders throughout the WTO dispute process. Canada's implementation of the DSB recommendations and rulings is based on careful consideration of the facts, Canada's WTO rights and obligations, and consultations with Canadian vehicle manufacturers and the provinces.

Compliance and Enforcement

The Canada Customs and Revenue Agency will administer the changes brought about by these Orders in the context of the administration of customs and tariff legislation/regulations.

Contact

Dean Steadman, International Trade Policy Division, Department of Finance, Ottawa, Ontario K1A 0G5, (613) 947-4508.

PROPOSED REGULATORY TEXT

Notice is hereby given that the Governor in Council, pursuant to subsection 14(2) and section 16 of the Customs Tariff(see footnote 1u), proposes to make the annexed Order Amending the Motor Vehicles Tariff Order, 1998.

Interested persons may make representations to the Minister of Finance or to the Minister of Industry Canada with respect to the proposed Order within 15 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Dean Steadman, International Trade Policy Division, Department of Finance, L'Esplanade Laurier, 14th Floor, East Tower, 140 O'Connor Street, Ottawa, Ontario K1A 0G5, (613) 947-4508 (Telephone), (613) 992-6761 (Facsimile) or to Guy Leclaire, Industry Canada, Automotive and Transportation Branch, C.D. Howe Building, Floor 010E, Room 1063C, 235 Queen Street, Ottawa, Ontario K1A 0H5, (613) 954-2949 (Telephone), (613) 952-8088 (Facsimile).

Ottawa, July 27, 2000

MARC O'SULLIVAN
Assistant Clerk of the Privy Council

ORDER AMENDING THE MOTOR VEHICLES TARIFF ORDER, 1998

AMENDMENTS

1. (1) The definition "net sales value" in subsection 1(1) of Part 1 of the schedule to the Motor Vehicles Tariff Order, 1998(see footnote 4) is repealed.

(2) Paragraph (b) of the definition "manufacturer" in subsection 1(1) of Part 1 of the schedule to the Order is replaced with the following:

(b) produced vehicles of the class in Canada in the 12-month period ending on July 31 during which the importation is made, if the Canadian value added is equal to or greater than the Canadian value added in respect of all vehicles of that class that have been produced in Canada by the manufacturer in the base year. (fabricant)

(3) Subsection 1(4) of Part 1 of the schedule to the Order is repealed.

2. The second sentence in the Declaration of Manufacturer under the Motor Vehicles Tariff Order, 1998 in Part 2 of the schedule to the Order is amended by adding the word "and" at the end of paragraph (b) and by repealing paragraph (c).

COMING INTO FORCE

3. This Order comes into force on September 17, 2000.

[32-1-o]

Footnote a

S.C. 1999, c. 26, s. 47

S.C. 1997, c. 20

SOR/99-295

S.C. 1992, c. 37

SOR/96-280

S.C. 1999, c. 33

S.C. 1999, c. 33

SOR/94-260

Not specially activated either by being part of a larger functional group, such as a vinyl ether, or by other activating influences, for example, strongly electron-withdrawing sulfone group with which the olefinic groups interact.

Footnote g