Canada Gazette, Part I, Volume 154, Number 23: ORDERS IN COUNCIL
June 6, 2020
DEPARTMENT OF THE ENVIRONMENT
CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999
Order Approving the Interim Order Modifying the Operation of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (Trailer Standards)
P.C. 2020-395 May 27, 2020
Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, pursuant to subsection 163(3) of the Canadian Environmental Protection Act, 1999 footnote a, approves the Interim Order Modifying the Operation of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (Trailer Standards), made by the Minister of the Environment on May 18, 2020.
EXPLANATORY NOTE
(This note is not part of the Order.)
Proposal
Pursuant to subsection 163(3) of the Canadian Environmental Protection Act, 1999 (CEPA), this Order approves the Interim Order Modifying the Operation of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (Trailer Standards) [the second Interim Order], made by the Minister of the Environment (the Minister) on May 18, 2020. This is the second Interim Order issued by the Minister, and approved by the Governor in Council, to suspend the greenhouse gas (GHG) trailer emission standards found in the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations in Canada.
Objective
The purpose of this second Interim Order is to further delay the trailer standards by up to another year to allow the Department of the Environment (the Department) to conduct further analysis and also allow more time to consult with all interested parties on a proposed approach for Canada. This would help inform the Department on the path forward to consider whether Canada should maintain, amend or repeal its trailer standards.
Background
The Regulations
The Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (the Regulations), made under CEPA, were published in the Canada Gazette, Part II, on March 13, 2013. The GHG emission standards in the Regulations apply to heavy-duty vehicles and engines of the 2014 model year and subsequent model years, and reach full stringency with model year 2018. Given the integration of the North American vehicle manufacturing sector, these standards are aligned with those of the U.S. Environmental Protection Agency (EPA).
On October 25, 2016, the U.S. EPA and the National Highway Traffic Safety Administration (NHTSA) agencies published the final rule concerning a second phase of GHG emission and fuel efficiency standards for heavy-duty vehicles, engines and trailers (referred to as Phase 2). The Phase 2 standards, which increase in stringency up to model year 2027, build upon the existing standards that were established for model years 2014 to 2018. In addition, the Phase 2 final rule introduced new standards for trailers hauled by on-road transport tractors, as trailer design has an impact on the GHG emissions and fuel consumption of the vehicles hauling them.
In December 2016, the Truck Trailer Manufacturers Association (TTMA), which represents the trailer industry in the U.S., filed a petition for the review of the U.S. EPA’s trailer standards in the U.S. Court of Appeals for the D.C. Circuit on the grounds that the agency lacked the authority to regulate trailers. Throughout 2017, TTMA also sent Petitions for Reconsideration, made under the U.S. rulemaking process, asking that the U.S. EPA reconsider the implementation of the GHG emission standards for trailers scheduled to come into force in the United States on January 1, 2018.
In response to legal challenges and petitions filed by the U.S. trailer industry, on August 17, 2017, the U.S. EPA announced it would begin a rulemaking process to amend its Phase 2 trailer provisions. Further, on October 27, 2017, the U.S. Court of Appeals stayed the implementation of the U.S. EPA Phase 2 trailer provisions. As a result, the U.S. EPA is currently not implementing their Phase 2 trailer provisions and have not, so far, proposed amendments to their rule.
On May 30, 2018, the Regulations Amending the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and Other Regulations Made Under the Canadian Environmental Protection Act, 1999 (the Amendments) were published in the Canada Gazette, Part II. The Amendments established more stringent GHG emission standards that begin with the 2021 model year for on-road heavy-duty vehicles and engines. Further, the Amendments introduced new GHG emission standards that apply to trailers hauled by on-road transport tractors for which the manufacture is completed on or after January 1, 2020. The Amendments are aligned with the corresponding standards and test procedures of the U.S. EPA final rule that was published in October 2016. The Regulations apply to companies that manufacture or import new on-road heavy-duty vehicles, engines and trailers for sale in Canada.
In making the decision to include the GHG emission standards for trailers in the Amendments, Canada intended to monitor U.S. developments and to assess whether any future amendments were needed depending upon the outcome of the U.S. rulemaking and legal processes.
In January 2019, the Canadian trailer manufacturing and trucking industry reached out to the Department expressing concerns that they could face adverse economic impacts if Canada implemented the trailer standards while they were not being implemented by the U.S. EPA and requested a delay in the implementation until further analysis was conducted by the Department.
The trailer manufacturing industry in Canada is mainly composed of small businesses with fewer than 100 employees that manufacture speciality trailers and of several larger manufacturers that manufacture mainly box van trailers and a variety of more specialized trailers.
Primary concerns raised by the Canadian industry include increased compliance costs, more limited availability of emission-reducing technology for trailers than anticipated due to reduced production in the United States, and a significant competitive disadvantage for Canada’s trailer manufacturers relative to larger U.S. manufacturers. Canadian trailer manufacturers are concerned that much larger U.S. trailer manufacturers could more easily absorb the incremental costs of implementing new technologies across a much larger market share.
In December 2019, the California Air Resources Board published an advisory notice to suspend the enforcement of their GHG trailer standards until at least January 1, 2022, in light of the regulatory uncertainty of the current court case and legal stay on the U.S. EPA’s trailer standards. California was also planning to implement trailer standards aligned with those of the U.S. EPA in 2020, but delayed the decision.
Interim Orders
CEPA provides the authority for an interim order to suspend or modify the operation of regulations governing emissions from vehicles, engines, and equipment for a period of up to one year to respond to a decision of a foreign court where the regulations in Canada are aligned with those in the other country. Pursuant to subsection 163(1) of CEPA, the Minister can issue an interim order to maintain alignment.
On May 27, 2019, the Minister issued the Interim Order Modifying the Operation of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations (Trailer Standards), which was subsequently approved by the Governor in Council on June 9, 2019. This temporarily suspended the application of the GHG trailer emission standards found in the Regulations until May 27, 2020.
The purpose of this first Interim Order was to allow the Department to assess the economic impacts of implementing trailer standards in Canada without the standards of the U.S. EPA being in force, while also waiting for more certainty on the situation in the United States.
Since the first Interim Order was issued, the Department has been monitoring the status of the trailer standards in the United States, commissioned two studies to better understand the trailer market in Canada and the United States, consulted with other government departments and gathered data to inform its analysis.
At this time, a second Interim Order is required to allow the Department to conduct further analysis and more time to consult with all interested parties on the proposed approach for Canada.
Without this second Interim Order, companies would be required to meet the trailer standards outlined in subsection 16.1(1) or 33.1(1) or (2) of the Regulations, as the case may be. These standards are aligned with those of the U.S. EPA. The Regulations apply to certain trailers, footnote 1 as defined by the Regulations, whose manufacture was completed on or after January 1, 2020.
Implications
Under CEPA, the Minister’s second Interim Order would cease to have effect 14 days after it was made unless approved by the Governor in Council. This Governor in Council Order approves the second Interim Order to delay the application of GHG emission standards for trailers in Canada for up to another year from the date that it is made by the Minister. Under subsection 163(5) of CEPA, the second Interim Order could cease to have effect earlier than one year if it is repealed or if the Regulations are amended or repealed to give effect to the order, whichever is earlier.
The Interim Order does not affect any provisions related to the vehicle and engine standards of the Regulations.
Relative to an estimated 73 megatonnes (Mt) of carbon dioxide equivalent (CO2e) emission reductions for the Amendments as a whole for model years 2020 to 2029, delaying the trailer standards for another model year will decrease the estimated GHG emission reductions for the Amendments by up to 0.8 Mt of CO2e for trailers of model years 2020 and 2021 combined.
While the second Interim Order is in place, the industry would benefit from cost savings (such as compliance costs and investment costs in new technologies), but would also not realize the fuel-saving benefits associated with adopting the technologies required to meet the standards.
Consultation
When the Amendments were developed and finalized in 2018, stakeholders in Canada were supportive of the Regulations aligning with the U.S. rule. After the Amendments were finalized, the Department continued to consult with the Canadian trailer manufacturing and trucking industry and monitored industry progress in preparing to comply with the Canadian trailer standards.
The Department received submissions in January of 2019 from the Canadian trailer manufacturing and trucking industry which indicated that it would face adverse economic impacts if the Department moved forward with the implementation of the trailer standards while the corresponding U.S. federal standards continued to be stayed. The Canadian trailer and trucking industry strongly recommended that the coming into force of the trailer provisions in Canada’s Regulations be delayed until a comprehensive economic analysis was conducted by the Department and it became clear how the U.S. EPA would proceed. Further, at that time, an environmental non-governmental organization also recommended that Canada maintain the GHG emission standards for trailers in their entirety and that the Department commission another economic analysis.
Since early 2020, the Canadian trailer and trucking industry has been seeking certainty on the regulatory path forward in Canada to allow for planning and investment decisions. The industry has indicated support for the second Interim Order. The Department is committed to ongoing consultation with all stakeholders, thoroughly considering the relevant issues raised, and communicating decisions with respect to the trailer standards in a timely manner.
Contact
Stéphane Couroux
Director
Transportation Division
Environment and Climate Change Canada
351 Saint-Joseph Boulevard, 13th Floor
Gatineau, Quebec
K1A 0H3
Telephone: 819‑420‑8020
Email: Stephane.Couroux@canada.ca
DEPARTMENT OF HEALTH
FOOD AND DRUGS ACT
Order Approving the Interim Order Respecting Clinical Trials for Medical Devices and Drugs Relating to COVID-19
P.C. 2020-411 May 30, 2020
Her Excellency the Governor General in Council, on the recommendation of the Minister of Health, pursuant to paragraph 30.1(2)(a) footnote b of the Food and Drugs Act footnote c, approves the Interim Order Respecting Clinical Trials for Medical Devices and Drugs Relating to COVID-19, made by the Minister of Health on May 23, 2020.
EXPLANATORY NOTE
(This note is not part of the Order.)
The Order approves the Interim Order Respecting Clinical Trials for Medical Devices and Drugs Relating to COVID-19 made by the Minister of Health on May 23, 2020. Without this approval, the Interim Order would, in accordance with paragraph 30.1(2)(a) of the Food and Drugs Act, cease to have effect 14 days after it was made. As a result of this approval, the Interim Order will, in accordance with paragraphs 30.1(2)(b) to (d) of the Food and Drugs Act, cease to have effect on the day on which it is repealed, on the day on which regulations having the same effect come into force or one year after the day on which the Interim Order is made, whichever is earliest.