Registration

SOR/2008-126 April 18, 2008

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

Regulations Amending the Gasoline Regulations

P.C. 2008-792 April 18, 2008

Whereas, pursuant to subsection 332(1) (see footnote a) of the Canadian Environmental Protection Act, 1999 (see footnote b), the Minister of the Environment published in the Canada Gazette, Part I, on December 22, 2007, a copy of the proposed Regulations Amending the Gasoline Regulations, substantially in the annexed form, and persons were given an opportunity to file comments with respect to the proposed Regulations or to file a notice of objection requesting that a board of review be established and stating the reasons for the objection;

Whereas the Governor in Council is of the opinion that the proposed Regulations could make a significant contribution to the prevention of, or reduction in, air pollution resulting from, directly or indirectly, gasoline or any of its components, or from gasoline’s effect on the operation, performance or introduction of combustion or other engine technology or emission control equipment;

And whereas, pursuant to subsection 140(4) of that Act, before recommending the proposed Regulations, the Minister of the Environment offered to consult with the provincial governments and the members of the National Advisory Committee who are representatives of aboriginal governments;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to section 140 of the Canadian Environmental Protection Act, 1999^b, hereby makes the annexed Regulations Amending the Gasoline Regulations.

REGULATIONS AMENDING THE GASOLINE REGULATIONS

AMENDMENTS

1. The definition “unleaded gasoline” in section 2 of the Gasoline Regulations (see footnote 1) is repealed.

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

(2) Until January 1, 2010, these Regulations, except for sections 2 and 11, do not apply in respect of gasoline for use in competition vehicles.

3. Section 4 of the Regulations is replaced by the following:

4. The maximum concentration of lead in gasoline produced, imported or sold in Canada is 5 mg/L.

4. The heading before section 5 and sections 5 and 6 of the Regulations are replaced by the following:

MAXIMUM CONCENTRATION OF PHOSPHOROUS IN GASOLINE

6. The maximum concentration of phosphorus in gasoline produced, imported or sold in Canada is 1.3 mg/L.

5. Sections 7 to 9 of the Regulations are replaced by the following:

7. The concentration of lead in gasoline produced, imported or sold in Canada shall be measured in accordance with the National Standard of Canada method CAN/CGSB-3.0 No. 19.5-2004, Methods of Testing Petroleum and Associated Products: Determination of Lead in Automotive Gasoline (Atomic Absorption), as amended from time to time.

8. The concentration of phosphorus in gasoline produced, imported or sold in Canada shall be measured in accordance with the ASTM International method ASTM D 3231-07, Standard Test Method for Phosphorus in Gasoline, as amended from time to time.

6. Section 10 of the Regulations is repealed.

7. Subsections 11(1) to (3) of the Regulations are replaced by the following:

11. (1) Every person who produces, sells or imports for use or sale in Canada leaded gasoline for use in competition vehicles shall make and retain a record of the quantities of leaded gasoline produced, sold or imported for use or sale in Canada each year and that record shall show

(a) the gasoline’s brand name;

(b) the gasoline’s octane rating and the test method by which the rating was determined;

(c) the average lead concentration in milligrams of lead per litre of gasoline on a yearly basis;

(d) the name and address of

(i) the distributor or reseller of the gasoline, if the gasoline was sold for distribution or resale, or

(ii) the track or event location where the gasoline was used, if the gasoline was sold at a particular track or event location; and

(e) the total quantity of leaded gasoline sold to each of the entities specified in subparagraph (d)(i) or at each of the locations specified in subparagraph (d)(ii).

(2) The record shall be submitted annually to the Minister on or before March 31 of the year following each year during which leaded gasoline was produced, sold or imported for use or sale in Canada.

(3) The record shall be retained in Canada for a period of five years beginning on the date the record is made.

8. The schedule to the Regulations is repealed.

COMING INTO FORCE

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

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Description

Purpos e

The purpose of the Regulations Amending the Gasoline Regulations (hereinafter referred to as the Amendments), made under section 140 of the Canadian Environmental Protection Act, 1999 (CEPA 1999), is to extend until January 1, 2010 the exemption with respect to leaded gasoline imported, produced or sold for use in competition vehicles. This extension will permit the industry to move forward with planned 2008 events and the 2009 racing season, while providing time for the government to further study the health risks of leaded gasoline use at Canadian race tracks.

The Amendments also remove the Regulatory provisions which allow the production, import and sale of leaded gasoline for use in farm machinery, boats, and large trucks. In addition, the Amendments update the Regulatory references to test methods for determining lead and phosphorus content in gasoline.

The Amendments come into force on the day on which they are registered.

Background

Lead has historically been added to gasoline to prevent engine damage due to the auto-ignition of gasoline (or knocking). Over the past decades, awareness of the human and environmental health impacts of lead has motivated actions to reduce the emission of lead from many sources, including gasoline. When they came into force in 1990, the Gasoline Regulations (hereinafter referred to as the Regulations) prohibited the production, import and sale of leaded gasoline, with exemptions provided for leaded gasoline used in aircraft, farm machinery, boats and trucks over 3 856 kg. The Regulations were amended in 1994 to add a two-and-a-half year exemption for leaded gasoline imported, produced or sold for use in competition vehicles (see footnote 2).

The 1994 amendments were made in response to evidence of the adverse economic impacts of the Regulations on the activities of some race tracks and communities. In 1993, cancellation of a large racing event at a Quebec race track resulted in significant adverse economic impacts for the facility and local community. The 1994 amendments provided the industry with an exemption period to ease the transition to unleaded gasoline or other alternatives, taking into account claims by international race sanctioning bodies indicating that they would convert to unleaded gasoline within two to three years.

The competition vehicle exemption has been extended on three occasions since 1994, in 1997, 1998 and 2003. On all three occasions, there has been a consistent message from industry: a broad transition to non-leaded fuels had not occurred, and expiry of the exemption would have a significant, negative impact on the industry, related businesses and local communities.

In 2003, the exemption was extended until January 1, 2008 based on a revised lead exposure assessment showing that intake levels at and in the vicinity of race tracks were within the World Health Organization (WHO) recommended Provisional Tolerable Weekly Intake (PTWI) for lead. The exemption was limited to five years due to increases in leaded gasoline imports in preceding years, and ongoing concerns regarding lead toxicity.

Public policy issue

The most recent exemption from certain provisions of the Regulations provided to competition vehicles expired on December 31, 2007. It is expected that without these Amendments, this expiry would result in the cancellation of upcoming events featuring competition vehicles using leaded gasoline, with concomitant direct and indirect impacts on revenue and employment. Racing stakeholders have voiced strong opposition to exemption expiry and have expressed concerns over the expected economic impacts, which could include loss of tourism and local revenues, and the closure of some facilities and related businesses.

Past health impact assessments were supported by risk assessments conducted in 1994 and 1997. The 1997 assessments concluded that lead levels in the vicinity of race tracks were acceptable when compared to the WHO’s recommended PTWI for lead. However, since the last amendments to the Regulations in 2003, new scientific evidence has become available that indicate a possibility of adverse health effects occurring at lower levels of lead exposure than previously thought acceptable, with children, toddlers and pregnant women being the most vulnerable to effects that may include cognitive and developmental deficits. As a result, the WHO PTWI levels used in past assessments may no longer be appropriate measures of tolerable exposure.

As the new scientific data clearly demonstrate that adverse health effects can arise at lead levels previously thought to be without harm, and given that the Canadian racing industry continues to grow, Health Canada has concluded that the continued use of leaded fuel in Canadian stock and drag car racing is a cause for concern. There is, however, uncertainty surrounding the level of human exposure, since no new health impact assessments have been conducted since 1997.

In addition, two administrative amendments are necessary in order to account for the absence of any reported leaded gasoline use by farm machinery, boats, and large trucks, and in order to respond to the need for updated lead and phosphorus test method references in the text of the Regulations.

Industry profile

There are an estimated 165 racing facilities operating in Canada, hosting racing events featuring different types of competition vehicles including stock cars, dragsters, motorcycles and other vehicles (boats, personal water craft, snowmobiles and go-karts). Many businesses benefit from the operations of these facilities, including racing-affiliated businesses such as fuel suppliers, engine repair and body shops and local businesses such as restaurants, camp grounds, motels, etc.

In 2006, 1.34 million litres of leaded gasoline were imported into Canada for use in competition vehicles (leaded gasoline is not manufactured in Canada for competition vehicle use) (see footnote 3). This volume represents just 1.5% of Canadian leaded gasoline use (the remaining volume is used under a permanent exemption provided to aviation), and 0.003% of all gasoline (including unleaded) produced in, or imported into Canada. Sales records indicate that, of that volume, 15 to 40% of leaded gasoline is used by stock cars, 40 to 50% by dragsters, 10 to 20% by motorcycles and 5 to 10% by other competition vehicles.

The type of fuel used at an event is dictated by the rules of the sponsoring race sanctioning body. Examples of race sanctioning bodies that have leaded gasoline specifications in their rule books include the National Hot Rod Association (NHRA), the International Hot Rod Association (IHRA), Champ Car, and the International Motor Sport Association (IMSA). Indy and Formula One competition vehicles do not use leaded gasoline (Indy cars run on ethanol, while Formula One cars run on unleaded gasoline).

The racing industry in North America is currently integrated between Canada and the U.S., with U.S. competitors participating in Canadian races and vice versa. Canadian race tracks tend to be located near the U.S. border and benefit from the participation of U.S. drivers. For many facilities, the racing events that draw the largest audiences tend to be anchored around events sanctioned by U.S.-based racing bodies such as the NHRA and IHRA (drag race sanctioning bodies). These events draw international competitors and spectators and Canadian race track operators have indicated that these events generate a significant portion of facility revenues.

Health profile

The use of leaded gasoline by some competition vehicles can result in the emission of lead in vehicle exhaust at race tracks. These emissions can increase lead levels in the air during races and can increase the lead content of soils at and in the vicinity of the tracks. Past health impact assessments were supported by risk assessments conducted in 1994 and 1997. The 1997 assessments concluded that lead levels in the vicinity of race tracks were acceptable when compared to the WHO’s recommended PTWI for lead. No additional air or soil sampling at or near race tracks have been conducted since 1997, and there is therefore no new information on human exposure to lead from competition vehicles.

Scientific research continues to document the adverse human health effects of lead. Several recent studies, including a recent U.S. Environmental Protection Agency (EPA) risk assessment (see footnote 4), present evidence for adverse health effects at low levels of lead exposures. Foetuses and toddlers are particularly at risk because lead exposure can affect their mental development, as they have less protection than adults from the absorption of lead into the blood and its subsequent transport into brain tissue. A toddler’s behaviour can also increase their risk of exposure to lead. Small children spend more time on the ground, engaging in hand-to-mouth behaviour, mouthing of objects and have a tendency to indiscriminately eat food items dropped or found on the ground or floor. There is also increasing evidence that some of the lead-induced learning disabilities resulting from childhood exposure can be irreversible and persist into adulthood. Over the past 30 years, there have been a number of epidemiological studies published that relate blood lead levels at the time of birth, during infancy and through early childhood with measures of physical, mental and behavioural outcomes. Furthermore, a large proportion of absorbed lead is transferred to the bones (hard tissue) where it accumulates over time and remains for long periods. During periods of physiological stress or when bone mass decreases with aging, the lead stored in the bones can be mobilized back into the bloodstream. An individual may therefore be at risk even years after being exposed to lead.

Many of the adverse health effects experienced by children can also be evident in adults who have been exposed to lead. While it is not yet fully understood how lead produces its associated adverse health effects, recent studies suggest that lead exposure can result in a broader range of illnesses than previously understood. Researchers have published their observations of the effects of lead exposure on many organs, including the kidneys, the heart and the brain. A wide range of behavioural effects have also been reported in lead-exposed adults. These effects can include forgetfulness; irritability; lethargy; impaired concentration; depression and mood changes; dizziness; and weakness, as well as diminished: reaction time; visual motor performance; hand dexterity; IQ scores and cognitive performance. Pregnant women and the foetus may also be especially vulnerable as lead stored in the bones as a result of past lead exposures may mobilize out into the blood stream and tissues such as the adult brain and the developing foetus during pregnancy, increasing the chances of miscarriage, stillbirths and low birth weights.

Although quantitative data on which to assess the actual human exposure to lead from racing events which use leaded fuels is currently lacking, it is reasonable to infer that vulnerable populations living near race tracks and/or attending racing events can be exposed to ambient lead. As the new scientific data clearly demonstrate that adverse health effects can arise at lead levels previously thought to be without harm, and given that the Canadian racing industry continues to grow and is marketed as a family activity, Health Canada has concluded that the continued use of leaded fuel in Canadian stock and drag car racing is a cause for concern, particularly to infants, toddlers and pregnant women who live near and/or attend car racing events.

National guidance for blood lead was last set in 1994. Health Canada is currently reviewing the toxicology of lead and the effects on human health at low levels of exposure.

Actions in other jurisdictions

The United States is not currently planning to ban or restrict the use of leaded fuels in racing events. The U.S. Clean Air Act prohibits the use of leaded gasoline in on-road vehicles, but specifically exempts fuels for “competition use vehicles.” The U.S. EPA has been working with the racing industry to effect change through voluntary means, and there has been voluntary transition to unleaded racing fuels by some U.S. sanctioning bodies. The National Association for Stock Car Auto Racing (NASCAR) fully converted to unleaded from leaded gasoline at the beginning of the 2007 racing season. The U.S. EPA, which worked with NASCAR on their conversion, has indicated that “any changes they [NASCAR] make are expected to have a significant effect throughout the industry.” (see footnote 5) The Indy Racing League’s Indy Pro Series also converted from leaded gasoline to non-leaded alternatives (unleaded and ethanol) over the 2006 and 2007 seasons. Canadian NASCAR races (formerly CASCAR) do not use leaded gasoline.

The United Kingdom’s (UK) Motor Fuel Regulations 1999 allow up to 100 000 tonnes (about 139 million litres) of leaded gasoline to be distributed or sold, including for use by competition vehicles.

Australian federal regulations limit lead in gasoline, however they allow the granting of approvals for leaded fuel to be sold and used in competition vehicles until December 31, 2008. These approvals are restricted to a limited number of government-approved motor and water sport organisations and their members.

The Amendments

The Amendments extend, until January 1, 2010, the exemption under subsection 3(2) of the Regulations with respect to gasoline imported, produced or sold for use in competition vehicles, from limits on the concentration of lead and phosphorus in gasoline as specified in the Regulations (record keeping and reporting requirements are still applicable). The duration of this extension takes into account the economic impacts of expiry communicated by stakeholders following publication of the proposed Amendments in Canada Gazette, Part I, and strives to balance these with the expected impact of long-term exposure to lead on human health. Taking into account the significance of the economic impacts on some race tracks, local and racing-affiliated businesses, and small communities, and that no new lead sampling has been conducted at Canadian race tracks since 1997, this exemption period will allow scheduled 2008 events and the 2009 racing season to proceed, while providing time for the Government to conduct further study of health risks.

The Amendments remove the provisions in subsection 4(2) of the Regulations which allow the production, import and sale of leaded gasoline for use in farm machinery, boats, and large trucks, as there has been no reported production, import or use of leaded gasoline for these purposes in recent years.

The Amendments also update references to the test methods for determining the concentrations of lead and phosphorus in gasoline found in sections 7 and 8 of the Regulations. Since the Regulations were last amended, these test methods have been reviewed and revised.

Alternatives

Several alternatives have been considered during the development of the Amendments, and they are presented below.

No a ction

Expiry of the competition vehicle exemption on December 31, 2007 without an extension is likely to result in the cancellation of racing events dependant on leaded gasoline, with concomitant direct impacts on race track revenue and employment, and indirect impacts on other businesses such as local restaurants, motels, campgrounds. Race tracks have already organized and promoted racing events for the 2008 season, including events featuring vehicles using leaded gasoline, and it is therefore expected that the impact of expiry would be significant in the absence of an additional transition period.

This alternative would also retain unnecessary provisions in the Regulations with respect to farm machinery, boats, and large trucks. In addition, this alternative would not update references to test methods for determining the concentrations of lead and phosphorus in gasoline.

Given these considerations, this alternative was rejected.

Regulatory m easure

Long-term or permanent exemption

The Government of Canada’s Toxic Substances Management Policy puts forward a precautionary and preventive approach to dealing with substances that enter the environment and could harm the environment and/or human health. The policy establishes the objective of preventing or minimizing the release of toxic substances. Lead, a substance on the List of Toxic Substances, Schedule 1 of CEPA 1999, is subject to this policy.

Quantitative data on which to assess human exposure to lead specifically from competition vehicles using leaded gasoline is currently unavailable. However, the racing industry continues to grow, and it is therefore expected that leaded gasoline use would increase over a long-term or permanent exemption. Given the new scientific evidence regarding the impact of lead on human health, it is reasonable to infer that vulnerable populations living near race tracks and/or attending racing events could be exposed to lead in the air and soil at levels that may be unsafe.

For these reasons, a long-term or permanent exemption was rejected.

Long-term exemption with complementary voluntary measure

Events associated with the greatest volumes of leaded gasoline use and those with the biggest crowds (and resulting economic activity) tend to be sanctioned by large U.S.-based sanctioning bodies. It is expected that these bodies would not voluntarily convert to non-leaded fuel for the relatively limited number of racing events sanctioned in Canada. Leaded gasoline use at these events would therefore be expected to continue under a long-term exemption with complementary voluntary measure, for the foreseeable future.

Given these considerations, it is unlikely that a long-term exemption with complementary voluntary measures would result in decreased use of leaded gasoline. Consequently this alternative was rejected.

Short-term exemption

A short-term exemption provides a compromise, taking into account the economic impacts associated with immediate expiry, and the potential health impacts associated with a long-term extension. A short-term exemption also provides the Government with time to conduct a more in-depth assessment of the health risks associated with the use of leaded gasoline in competition vehicles, and the economic impacts of exemption expiry.

Additional changes

A regulatory measure is the only alternative that allows for two additional changes to the Regulations. First, unnecessary provisions in the Regulations that provide an exemption from limits on the concentration of lead and phosphorus in gasoline to farm machinery, boats, and large trucks, can be removed. Second, references to the test methods for determining the concentrations of lead and phosphorus in gasoline can be updated.

Benefits and costs

Benefits

Industry

In the absence of the Amendments, upcoming racing events featuring competition vehicles using leaded gasoline would be cancelled, including those racing events sanctioned by major U.S. sanctioning bodies that use leaded gasoline (e.g. the IHRA and NHRA). Data show three IHRA national events and one NHRA divisional event planned for 2008, located at race tracks in Ontario, Alberta, Quebec, and British Columbia. The cancellation of racing events would have a direct, negative impact on facility revenues, in addition to indirect impacts on affiliated businesses and communities, with increased impacts on facilities that have already planned events for the 2008 season.

The cancellation of racing events is also likely to result in significant impacts for race tracks located in rural or remote locations, where economic activity affiliated with the racing facility may contribute more significantly to local economic activity when compared to facilities in more densely populated regions with more diversified economies.

The Amendments allow the racing industry to maintain its current status until January 1, 2010, and thus avoid the costs associated with exemption expiry during the 2008 and 2009 seasons. Benefits are expected to be most significant for facilities hosting special events sponsored by large U.S. sanctioning bodies, such as the IHRA and NHRA, and at facilities close to the U.S. border, where competing leaded gasoline events may exist at nearby U.S. tracks.

Racing fuel suppliers will benefit from the continued use of leaded gasoline during 2008 and 2009, thus avoiding the costs associated with exemption expiry. Leaded gasoline imports — valued at $3.7 million in 2006 — will be permitted for the duration of the exemption.

Additional benefits

The provisions in subsection 4(2) of the Regulations have become unnecessary as there have been no recent reported leaded gasoline production, import or use for/by farm machinery, boats and large trucks. There is not expected to be any incremental impact associated with the removal of these unnecessary provisions, beyond the limited benefit of streamlining the Regulations.

Since the Regulations were last amended, the test methods referenced in sections 7 and 8 have been revised. The Amendments update the reference to these test methods, reflecting their new edition numbers. This change will have no incremental impact beyond the benefit of increased clarity in the content of the Regulations.

Costs

Industry

The incremental cost to industry includes the relatively small cost to importers and sellers of leaded gasoline, of record keeping and reporting leaded gasoline imports and sales in 2008 and 2009. With the Amendments, persons who produce, import or sell leaded gasoline for competition vehicles will continue to be required to retain and submit records to Environment Canada on the quantities and lead concentrations of leaded gasoline produced, imported and sold in Canada.

Government

The Amendments will result in negligible incremental costs associated with compliance promotion, enforcement and the administration of the Regulations (including maintenance of the database of submitted industry data) for the duration of the exemption.

Canadian public

The 1997 health impact assessments concluded that lead levels in the vicinity of race tracks were acceptable when compared to the WHO’s recommended PTWI for lead. However, recent studies have indicated that adverse health effects can arise at lead levels previously thought to be without harm. The impact of leaded gasoline use on spectators, employees, participants and local residents is therefore a cause for concern, although the level of impact is uncertain. Further study is required to clarify these impacts.

It is reasonable to infer however, that vulnerable populations attending these events and/or living near the race tracks may face continued potential exposure to lead for the duration of the exemption.

Additional changes

There are no expected incremental costs associated with the removal of unnecessary provisions in the Regulations that provide an exemption to farm machinery, boats and large trucks, or for updating references to test methods.

Summary of benefits and costs

The Amendments result in a net benefit to industry. The impacts are most significant for race tracks deriving revenues from events featuring competition vehicles using leaded gasoline, including events sanctioned by large U.S. sanctioning bodies, and for those race tracks hosting leaded events that are located in rural or remote areas.

In the absence of recent, specific lead exposure data, it is not possible to quantify the health costs associated with the exemption. There are also no recent qualitative reports of health impacts resulting from exposure to lead at race tracks. Notwithstanding this lack of recent, specific exposure data, new scientific data suggests that adverse health effects may arise at lead levels previously thought to be acceptable.

Consultation

Public consultations were held with the release of a discussion paper in May 2007, for a four-week public comment period. This document was sent to 170 stakeholders, including race tracks, race associations, fuel distributors, affiliated businesses, municipalities and to over 560 parties who had expressed interest in receiving information from Environment Canada regarding fuels issues. Written comments were received from 11 parties, including race associations, racing fuel suppliers, race track owner/operators, provincial governments, engine builders, and private citizens.

Alternative exemption extension periods

One province, a racing fuel supplier, a race association and a private citizen requested that there be no extension to the competition vehicle exemption, while one province, two racing fuel suppliers, one race track, one race association and two engine builders requested that the exemption be extended for periods ranging from five years to indefinite.

Environment Canada considered a number of alternatives to the extension period, including allowing the exemption to expire and extending it for a longer period of time. Given the economic impacts expected as a result of immediate expiry, allowing the exemption to expire was rejected. In recognition of the potential health impacts associated with long-term, continued use of leaded gasoline by competition vehicles, a long-term exemption was also rejected. The Amendments take into account the comments raised by all parties in response to the discussion document and provide additional time for analysis of the issue.

In addition, the Minister of the Environment consulted with members of the CEPA National Advisory Committee, representing provinces, territories and aboriginal governments during the summer of 2007.

One province disagreed with any further extension to the leaded gasoline exemption for competition vehicles. Environment Canada has rejected immediate expiry as an option given the expected economic impacts on race tracks, employees, affiliated businesses and communities.

Comments received following pre-publication of the Amendments in the Canada Gazette, Part I, on December 22, 2007.

During the 60-day comment period following pre-publication of the Amendments, comments were received from over 400 interested parties representing race tracks, racing affiliated businesses, professional racers, hobbyists and race fans. Several petitions opposing a ban were also submitted by concerned parties. Two stakeholders, a manufacturer of engines that run on non-leaded fuels and a U.S.-based race sanctioning organization, submitted comments in support of the proposal. The remaining comments generally expressed strong opposition to the duration of the exemption. The comments received, and Environment Canada’s responses, are summarized below.

Five notices of objection were received following publication of the proposed Regulations on December 22, 2007, all in opposition to ending the exemption in 2009. The notices of objection focused on health impacts and the lack of current scientific study on the impacts of using leaded gasoline in motor sport racing applications, and the economic impacts on the racing industry and affiliated business should a ban on leaded gasoline come into effect in 2009.

The notices of objection were considered and Environment Canada provided a response directly to each intervener. As the notices of objection did not provide any new information with respect to the nature and extent of the danger posed by leaded gasoline, the Minister of the Environment has therefore decided not to establish a Board of Review.

Impact on race tracks and affiliated businesses

Several commenters indicated that Canada’s three largest race tracks (two in Ontario, one in Alberta) would close, as would other smaller tracks. Three of the large race tracks provided submissions to Environment Canada concerning the economic implications of exemption expiry in 2009. Two of the race tracks indicated that, should the International Hot Rod Association national events pull out of Canada, their facilities would lose an estimated 40% and 80% of their revenues respectively. These race tracks indicated that as a result of these impacts, they would likely close.

A number of small businesses, including racing fuel distributors, manufacturers and suppliers of race engine parts, and performance repair and body shops, indicated that they would face significant economic impacts should the exemption expire in 2009, including possible closure. These impacts are closely linked with the potential shut down of the drag racing industry. One race association affiliated with the International Hot Rod Association and National Hot Rod Association also indicated that it would cease operation following expiry of the exemption.

While the majority of comments focused on the effect of the proposed Amendments on the drag racing industry, there were some comments related to other competition vehicles. One commenter suggested that motocross, snocross, watercraft racing and sport bike racing associations and facilities would face closure. Another commenter suggested that the Canadian jet boat racing community would cease to exist if the proposed Amendments were passed.

In light of comments received from industry stakeholders regarding the impacts of the exemption expiring at the end of 2008, Environment Canada is extending the exemption until the end of 2009, will continue to study these impacts, and will work with Health Canada to study the associated risks to human and environmental health of exposure to lead at Canadian race tracks and local communities.

Tourism and localised impacts

Several commenters stated that expiry of the exemption would result in a significant reduction in tourism spending and other economic activity, as Canada would lose some leaded racing events, attract fewer U.S.-based competitors, and face the closure of some facilities. One municipality in Ontario expressed concern that exemption expiry could force a nearby race track to close, resulting in widespread impacts on local businesses and the municipality. Another municipality in Alberta indicated that recent expenditures at a local race track would be lost as a consequence of exemption expiry.

As indicated above, Environment Canada acknowledges the potential economic impact of the Amendments on race tracks and affiliated businesses, including the impact on local communities and tourism. Environment Canada has taken these into consideration in its decision to extend the exemption until the end of 2009 and further study these issues.

North American integration of the racing industry

Several stakeholders commented that the drag racing industry is integrated between Canada and the U.S., and suggested that Canada postpone expiry of the exemption until such time as the U.S. enacts similar requirements, or until the U.S.-based race sanctioning bodies independently transition to non-leaded fuel.

Environment Canada recognizes that elements of the industry are integrated between Canada and the U.S., and that U.S. race sanctioning bodies sponsor several high-profile Canadian racing events. While there has been some movement in the industry to convert to non-leaded fuels since 1994, there has been little advancement to date by some race sanctioning bodies. It is therefore expected that these bodies would not voluntarily convert to non-leaded fuel for the relatively limited number of racing events sanctioned in Canada. One U.S. race sanctioning body has confirmed that this conversion would not take place. As a result, these events would likely be cancelled. However, in recognition of the potential health impacts associated with long-term, continued use of leaded gasoline by competition vehicles, a long-term or permanent exemption was rejected.

Aviation gasoline exemption

Several commenters suggested that the exemption for racing fuel should not be ended as there is an ongoing exemption for leaded gasoline used by aircraft.

Transport Canada has indicated that it is not aware of a non-leaded replacement fuel for use in some aircraft. Safety is the Government’s top priority when certifying aircraft for airworthiness and there can be serious safety concerns and maintenance issues with the use of a grade of fuel different from that for which the engine was initially designed. The government is not currently considering a change to the exemption for leaded gasoline used in aircraft, until such time as a suitable replacement to tetra-ethyl lead in aviation gasoline becomes available and aircraft and their engines are certified to use it.

Implications for street racing

Several commenters argued that the closure of local race tracks would result in an increase in street racing, with health and safety implications for local residents.

Environment Canada acknowledges the concerns of stakeholders with respect to street racing. The federal government and several provinces have laws specifically aimed at deterring street racing, and it is not expected that the Amendments would interfere with these and other important actions to address this problem.

Health impacts

Commenters expressed the view that the adverse health effects from the use of lead in racing fuel have not been demonstrated.

The Government is committed to protecting Canadians from the proven risks associated with lead exposure wherever possible. Lead can be harmful to the health of people of all ages, with children and foetuses being the most vulnerable. Recent scientific studies indicate that adverse health effects may occur at lower levels of lead exposure than previously thought. The continued use of leaded fuels in competition vehicles may pose a risk to certain populations, including toddlers and pregnant women who live near and/or attend racing events featuring competition vehicles using leaded fuel. A long-term or permanent exemption has therefore been rejected as an appropriate course of action at this time. Environment Canada will continue to work with Health Canada to study these impacts.

Compliance and enforcement

The Amendments do not alter the manner in which the Regulations are enforced.

Contacts

Lorri Thompson
Oil, Gas and Energy Division
Environment Canada
Gatineau, Quebec
K1A 0H3
Telephone: 819-934-1848
Fax: 819-953-8903
Email: lorri.thompson@ec.gc.ca

Markes Cormier
Regulatory Analysis and Instrument Choice Division
Environment Canada
Gatineau, Quebec
K1A 0H3
Telephone: 819-953-5236
Fax: 819-997-2769
Email: markes.cormier@ec.gc.ca

Footnote a
 S.C. 2004, c. 15, s. 31

Footnote b
 S.C. 1999, c. 33

Footnote 1
 SOR/90-247

Footnote 2
 A competition vehicle is defined in the Regulations as “a vehicle or boat that is used exclusively for competition and does not include a vehicle that is used on a higway or a vehicle or boat that is used for recreational purposes.”

Footnote 3
 The import volume data is compiled from annual reports received by Environment Canada pursuant to the reporting requirements of the Gasoline Regulations.

Footnote 4
 U.S. EPA, Air Quality Criteria for Lead, 2006. Available at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=158823

Footnote 5
 U.S. EPA, Persistent, Bioaccumulative, and Toxic Pollutants (PBT) Program, PBT National Action Plan for Alkyl-lead, June 2002

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