ARCHIVED — Vol. 151, No. 11 — May 31, 2017

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Registration
SOR/2017-92 May 19, 2017

ECONOMIC ACTION PLAN 2014 ACT, NO. 1

Order Amending the Order Fixing the Day for the Purposes of Sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1

P.C. 2017-547 May 19, 2017

His Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1 (see footnote a), makes the annexed Order Amending the Order Fixing the Day for the Purposes of Sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1.

Order Amending the Order Fixing the Day for the Purposes of Sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1

Amendment

1 Section 1 of the Order Fixing the Day for the Purposes of Sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1 (see footnote 1) is replaced by the following:

Day for purposes of certain sections

1 The day for the purposes of sections 130, 133 and 135 of the Economic Action Plan 2014 Act, No. 1 (see footnote 2) is fixed as June 1, 2018.

Coming into Force

2 This Order comes into force on the day on which it is registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the orders.)

Issues

Safety data sheets (SDS), which accompany hazardous products sold or imported for use in Canadian workplaces, must disclose the concentrations or concentration ranges of ingredients in the product that present health hazards in accordance with the Hazardous Products Regulations (HPR). This information is often considered confidential business information (CBI) to industry. CBI for workplace hazardous products can be protected by filing an application with Health Canada under the Hazardous Material Information Review Act (HMIRA) and paying the associated fee.

Regulated parties have proposed that they should have a means to protect the concentrations or concentration ranges of ingredients (as opposed to the identity of the ingredient) without having the burden and cost of the HMIRA application process. However, manufacturers and importers of hazardous products are required to comply with the HPR by June 1, 2017 (the first deadline in the transition to HPR implementation). Industry has estimated that thousands of claims will need to be filed prior to the June 1, 2017, deadline in order to protect concentrations as CBI as of that date.

The proposal from industry has been discussed with other stakeholders and has received some support. There remains insufficient time prior to the first transition deadline (June 1, 2017) to conclude consideration of this issue. More time is required to determine whether stakeholders can reach the consensus on recommending a potential amendment of the HPR to implement industry’s proposal. The only way to enable the resolution of discussions on this issue prior to the filing of the estimated thousands of claims is to delay the first transition deadline of June 1, 2017, to a later date.

Background

The Workplace Hazardous Materials Information System (WHMIS), Canada’s national hazard communication standard, came into effect on October 31, 1988. It represents tripartite consensus between regulators, industry and organized labour. It is implemented through coordinated federal, provincial and territorial (FPT) legislation using an integrated approach that avoids duplication, inefficiency, and the potential for interprovincial trade barriers by allowing application of a single consistent hazard communication system nationwide. WHMIS is supported by the Current Issues Committee (CIC), which includes representatives of FPT regulators, suppliers, employers and organized labour. The Hazardous Products Act (HPA) requires consultation with those representatives prior to making or amending regulations under the HPA, therefore the CIC is the mechanism by which discussions on industry’s proposal have been undertaken thus far.

On February 11, 2015, the HPR came into force and the Controlled Products Regulations (CPR) were repealed. This fulfilled a commitment under the Canada–United States Regulatory Cooperation Council (RCC) to implement the Globally Harmonized System (GHS) for the classification and labelling of chemicals in Canada without reducing the level of safety or protection for workers. This modified WHMIS is referred to as WHMIS 2015.

Regulated parties are currently in transition from the old WHMIS to WHMIS 2015. The phases of transition were set up in such a way as to allow three steps to occur in sequence. First, manufacturers and importers (those responsible for bringing products to the Canadian market) must comply with the HPR by June 1, 2017, then distributors (those responsible for reselling products on the Canadian market) have to comply with the HPR by June 1, 2018. Following this, there was national agreement among all FPT jurisdictions that the final stage of transition, which allows for updating of existing information in the workplace by employers, would be completed by December 1, 2018. This final transition deadline is set by the FPT jurisdictions responsible for occupational health and safety, not by Health Canada.

Health Canada officials have learned that under the old CPR some companies protected their CBI ingredient concentrations by disclosing prescribed concentration ranges rather than using the CBI protection mechanism provided by the existing HMIRA. Prescribed concentration ranges were generic ranges set out in the repealed CPR that companies could use when the concentration of an ingredient varied from batch to batch in the manufacturing of a product. The CPR prescribed concentration ranges were not retained in the HPR. Instead, the HPR requires the true concentrations or concentration ranges of ingredients that present health hazards to be disclosed. In order to protect the concentrations or concentration ranges of ingredients, industry must use the CBI protection mechanism provided by the HMIRA. Therefore, the protection of CBI concentrations of ingredients that used to occur by the use of prescribed concentration ranges now requires a submission under the HMIRA, and this means that the number of filings Health Canada receives will increase.

Industry representatives have estimated that thousands of claims will need to be filed under the HMIRA in order to protect the concentrations or concentration ranges of ingredients as CBI when they transition to HPR compliance, and that these filings would cost in the millions of dollars. They have stated that the HMIRA requirements for CBI protection in Canada put them at a disadvantage compared to the United States.

Alignment of the mechanisms to protect CBI in Canada and the United States was outside the scope of the RCC commitment. In the United States, as in Canada, companies are required to identify on product labels and SDSs when information is withheld due to a CBI claim. However, unlike in Canada, the United States approach allows suppliers to self-declare information as CBI, with no application or verification process by the United States Occupational Health and Safety Administration. There is no applicable fee related to verification of CBI claims in the United States. In Canada, there is a fee associated with the Health Canada review of applications for the CBI exemption. The fee schedule is set out in sections 4, 5, and 7 to the Hazardous Materials Information Review Regulations.

Currently, all suppliers have the option of complying with either the CPR or the HPR. However, in order to protect ingredient concentrations or concentration ranges as CBI once suppliers transition to compliance with the HPR, they would have to use the mechanism provided by the HMIRA. Since manufacturers and importers of hazardous products are required to comply with the HPR by June 1, 2017, they would have to submit any CBI claims before that date.

In order to avoid the burden of protecting CBI under the HMIRA, industry stakeholders have proposed that prescribed concentration ranges could be permitted in the HPR and used to replace actual concentrations and concentration ranges of ingredients rather than having to use the HMIRA to protect CBI. Their proposal would allow the supplier to choose whether to disclose the actual point of concentration or concentration range of the ingredient or to make use of the prescribed concentration ranges. In this way, the protection of CBI ingredients could occur by the use of prescribed concentration ranges, so the number of filings Health Canada receives under the HMIRA would not increase.

Objectives

The objective of these amendments is to extend the first two transition milestones for WHMIS 2015, in order to provide additional time for Health Canada to conclude consideration of this proposal from industry through consultations with stakeholders, including labour representatives.

Description

The amendments delay the transition deadline for manufacturers, importers, and distributors to become compliant with WHMIS 2015. More specifically, the June 1, 2017, transition deadline for manufacturers and importers is delayed to June 1, 2018, and the June 1, 2018, transition deadline for distributors to become compliant is delayed to September 1, 2018.

“One-for-One” Rule

The “One-for-One” Rule does not apply, as the amendments do not contain requirements that would place an administrative burden on industry.

Small business lens

The small business lens does not apply, as there are no costs to small business.

Consultation

The proposal to use prescribed concentration ranges was discussed by representatives of WHMIS stakeholders (industry, labour, employers and FPT regulators) in late 2016 and early 2017. There was general agreement that the use of prescribed concentration ranges might be acceptable to all parties under certain circumstances. However, additional issues raised by labour representatives relating to the protection of product sectors excluded from WHMIS (e.g. consumer products and manufactured articles), and the protection of ingredients that are carcinogens, mutagens, reproductive toxins and respiratory sensitizers (CMRs) as CBI remain under discussion. Labour representatives have sought concessions on these additional issues as a condition of their support for the proposal from industry.

Industry strongly supports the delay of the transition period, as it would allow for the continued consideration of their proposal for potential amendments to the HPR without first requiring the filing of claims under the HMIRA. If the transition period is not extended, industry will have to file the claims under the HMIRA to protect ingredient concentrations before June 1, 2017. Those submissions would become redundant if the HPR is eventually amended to allow the use of prescribed concentration ranges.

Representatives of distributors have expressed support for the extension of the two transition periods.

Representatives of provincial and territorial governments responsible for regulation of occupational health and safety, as well as the federal Labour Program at Employment and Social Development Canada, elected not to participate in the discussions of industry’s proposal. They underlined the importance of their December 1, 2018, deadline not being affected. Employers are not subject to the HPA or the HPR, and also elected not to participate in discussions on the industry proposal.

Some of the employer representatives and some regulators expressed concern that this would leave employers with only three months (as opposed to the planned six-month period) to transition after they received the last shipment of CPR compliant products from distributors. Health Canada will support employers in this shortened transition period by providing guidance on best practices that employers can use to proactively prepare for and minimize the burden of transition.

Representatives of labour do not support the extension of the deadlines for transition given that the additional issues they raised relating to excluded product sectors and CMRs have not been agreed. They expressed that they appreciate the current system that exists for the protection of CBI and would prefer to have the discussions of the issues conclude before any regulatory amendments are made.

Rationale

The delay in the transition deadlines is intended to provide additional time for Health Canada to conclude consideration of the proposal from industry. In the absence of this delay, manufacturers, and importers, would need to become compliant with the HPR on June 1, 2017, and distributors would need to become compliant on June 1, 2018. Any further delay of the second transition deadline is not possible, as it would impact the regulations passed by federal, provincial and territorial authorities responsible for regulation of occupational health and safety, which include a final deadline for compliance by employers of December 1, 2018.

Benefits

Extending the transition periods will provide Health Canada the time necessary to work with stakeholders to address the issue of CBI protection identified by industry, while taking into consideration possible ways to address the concerns raised by labour representatives relating to excluded product sectors and CMRs. This would delay the need for suppliers to have to file claims for confidential information under the HMIRA during these deliberations.

Costs

The costs associated with the delay are expected to be minimal, as the extension to the transition deadlines will allow stakeholders additional time to comply with the regulatory requirements of WHMIS 2015.

The delayed transition to WHMIS 2015 will delay the accrual of benefits to industry expected from the implementation of WHMIS 2015. However, industry supports the extension of the deadlines so that it has additional time in which to transition to WHMIS 2015. It should be noted that the extension of the deadlines does not preclude the earlier transition to WHMIS 2015 by companies choosing to do so.

For the companies seeking to protect concentrations as CBI, who would choose to continue to comply with the CPR during the proposed extended transition periods, the benefits that WHMIS 2015 offers relating to trade with the United States will be deferred. Industry estimate that this will affect approximately 10 000 products. The Canadian Centre for Occupational Health and Safety estimates that there are over 300 000 industrial chemical products on the market in Canada, such that this delay can be estimated to impact approximately 3% of Canadian workplace hazardous chemicals.

This delay would also tighten the transition period for distributors to last only three months past the transition deadline for manufacturers and importers. As a result, distributors might assume additional costs to reconfigure products to comply with the HPR if they retain large volumes of CPR compliant stock near the end of their new transition period. However, the Canadian industry association representing distributors of hazardous workplace chemicals (Responsible Distribution Canada) is supportive of industry’s proposal, and supports the extension of the transition deadlines. It has indicated that it is prepared to take measures to mitigate the challenges of having a shortened transition period.

Likewise, the delay would shorten the employer’s transition period to three months. Employers could also assume additional costs to reconfigure products to comply with the HPR if they retain large volumes of CPR compliant stock near the end of their transition period. However, Health Canada will support employers in this shortened transition period by providing guidance on best practices that employers can use to proactively prepare for and minimize the burden of transition.

In conclusion, the proposed amendments would provide additional time to further consider the issues raised by industry and labour prior to requiring manufacturers and importers to transition to the HPR.

Contact

Julie Calendino
Manager
Regulatory and Compliance and Enforcement Division
Health Canada
269 Laurier Avenue West, 8th Floor
Ottawa, Ontario
K1A 0K9
Telephone: 613-952-5208
Fax: 613-952-2551
Email: julie.calendino@hc-sc.gc.ca