Regulations Amending Certain Regulations Made Under the Canadian Environmental Protection Act, 1999: SOR/2022-204

Canada Gazette, Part II, Volume 156, Number 21

Registration
SOR/2022-204 October 3, 2022

CANADIAN ENVIRONMENTAL PROTECTION ACT, 1999

P.C. 2022-1053 September 29, 2022

Whereas, under subsection 332(1)^{footnote a} of the Canadian Environmental Protection Act, 1999 ^{footnote b}, the Minister of the Environment published in the Canada Gazette, Part I, on December 18, 2021 a copy of the proposed Regulations Amending Certain Regulations Made Under the Canadian Environmental Protection Act, 1999, substantially in the annexed form, and interested 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;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of the Environment, makes the annexed Regulations Amending Certain Regulations Made Under the Canadian Environmental Protection Act, 1999 under section 160^{footnote c} of the Canadian Environmental Protection Act, 1999 ^{footnote b}.

Regulations Amending Certain Regulations Made Under the Canadian Environmental Protection Act, 1999

On-Road Vehicle and Engine Emission Regulations

1 (1) The definition heavy-duty vehicle in subsection 1(1) of the On-Road Vehicle and Engine Emission Regulations ^{footnote 1} is replaced by the following:

heavy-duty vehicle

means an on-road vehicle that has a GVWR of more than 3 856 kg (8,500 lb). (véhicule lourd)

(2) The portion of the definition light-duty truck in subsection 1(1) of the Regulations before paragraph (a) is replaced by the following:

light-duty truck

means an on-road vehicle that has a GVWR of 3 856 kg (8,500 lb) or less and that

Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations

2 Paragraph 18(3)(b) of the Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations ^{footnote 2} is replaced by the following:

• (b) section 240(b)(5) of CFR 1068.

Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations

3 (1) The definitions electric vehicle, engine configuration, heavy-duty incomplete vehicle and heavy-duty vehicle in subsection 1(1) of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations ^{footnote 3} are replaced by the following:

electric vehicle

means a heavy-duty vehicle, other than a fuel cell vehicle, that is not equipped with an internal combustion engine and is powered solely by an external source of electricity or solar power or a combination of electricity and solar power. (véhicule électrique)

engine configuration

means a unique combination of heavy-duty engine hardware and calibration that has an effect on measured emissions within an engine family or engine subfamily, as the case may be. (configuration de moteur)

heavy-duty incomplete vehicle

means a heavy-duty vehicle, an on-road vehicle with a curb weight of more than 2 722 kg (6,000 pounds) or an on-road vehicle with a basic vehicle frontal area in excess of 4.2 m² (45 square feet) that consists of, at a minimum, a chassis, a powertrain and wheels in the state in which all of those components are to be part of the vehicle, but that requires further manufacturing operations to be completed. (véhicule lourd incomplet)

heavy-duty vehicle

means an on-road vehicle that has a GVWR of more than 3 856 kg (8,500 pounds) but does not include a medium-duty passenger vehicle as defined in subsection 1(1) of the On-Road Vehicle and Engine Emission Regulations or a vehicle regulated under the Passenger Automobile and Light Truck Greenhouse Gas Emission Regulations. (véhicule lourd)

(2) The definition heavy heavy-duty vehicle in subsection 1(1) of the Regulations is amended by striking out “or” at the end of subparagraph (b)(i) and by replacing subparagraph (b)(ii) with the following:

• (ii) a Class 8 vocational vehicle that is an electric vehicle,
• (iii) a Class 8 vocational vehicle that is a fuel cell vehicle,
• (iv) a Class 8 vocational vehicle that is a hybrid vehicle, or
• (v) a Class 8 tractor. (gros véhicule lourd)

(3) Subparagraphs (b)(i) and (ii) of the definition medium heavy-duty vehicle in subsection 1(1) of the Regulations are replaced by the following:

• (i) a Class 6, Class 7 or Class 8 vocational vehicle that is not a hybrid vehicle and is equipped with an engine other than a heavy heavy-duty engine,
• (ii) a Class 6 or Class 7 vocational vehicle that is an electric vehicle,
• (iii) a Class 6 or Class 7 vocational vehicle that is a fuel cell vehicle,
• (iv) a Class 6 or Class 7 vocational vehicle that is a hybrid vehicle, or
• (v) a Class 7 tractor. (véhicule mi-lourd)

(4) Subsection 1(1) of the Regulations is amended by adding the following in alphabetical order:

engine subfamily,

in respect of a company’s heavy-duty engines other than those referred to in section 25, means the grouping within an engine family having the same CO₂ family certification level, determined in accordance with section 230 of Title 40, chapter I, subchapter U, part 1036, subpart C, of the CFR. (sous-famille de moteurs)

fuel cell vehicle

means a heavy-duty vehicle propelled solely by an electric motor, the energy for the motor being supplied by an electrochemical cell that produces electricity via the non-combustion reaction of a consumable fuel, typically hydrogen. (véhicule à pile à combustible)

4 Subsection 4(3) of the Regulations is replaced by the following:

Vocational vehicles and tractors — as of 2021

(3) For vocational vehicles, incomplete vocational vehicles, tractors and incomplete tractors whose main assembly is completed on or after January 1, 2021, the vehicle’s model year is the calendar year corresponding to the calendar year during which its main assembly is completed. However, a company may choose to designate the vehicle’s model year as being

• (a) the model year that corresponds to the calendar year after the calendar year during which the vehicle’s main assembly is completed; or
• (b) the model year that corresponds to the calendar year before the calendar year during which the vehicle’s main assembly is completed if,
  • (i) in the case of a vehicle whose engine is installed in the United States, the engine’s model year is also from an earlier year in accordance with section 601(a)(2) of Title 40, chapter I, subchapter U, part 1037, subpart G, of the CFR and, if the engine is installed after March 31 of the calendar year during which the vehicle’s main assembly is completed, the company has obtained prior approval from the EPA, and
  • (ii) in the case of a vehicle whose engine is installed in Canada,
    • (A) the engine’s model year is also from an earlier year and the standards applicable under these Regulations to engines of that earlier model year are the same as those applicable to engines of a model year that corresponds to the calendar year during which the vehicle’s main assembly is completed, or
    • (B) the engine’s model year is the model year that corresponds to the calendar year before the calendar year during which the vehicle’s main assembly is completed and the engine is installed before March 31 of the calendar year during which the vehicle’s main assembly is completed.

5 (1) Subparagraph 12.2(1)(a)(ii) of the Regulations is amended by striking out “or” at the end of clause (A) and by replacing clause (B) with the following:

• (B) the calendar year after the calendar year during which the main assembly of the vocational vehicle, incomplete vocational vehicle, tractor or incomplete tractor in which the engine is installed is completed, or
• (C) if the conditions set out in subparagraph 4(3)(b)(i) or clause 4(3)(b)(ii)(A) or (B) are met, the calendar year before the calendar year during which the main assembly of the vocational vehicle, incomplete vocational vehicle, tractor or incomplete tractor in which the engine is installed is completed; and

(2) Subparagraph 12.2(1)(b)(ii) of the Regulations is amended by striking out “or” at the end of clause (A) and by replacing clause (B) with the following:

• (B) the calendar year after the calendar year during which the main assembly of the vocational vehicle, incomplete vocational vehicle, tractor or incomplete tractor in which the engine is installed is completed, or
• (C) if the conditions set out in subparagraph 4(3)(b)(i) or clause 4(3)(b)(ii)(A) or (B) are met, the calendar year before the calendar year during which the main assembly of the vocational vehicle, incomplete vocational vehicle, tractor or incomplete tractor in which the engine is installed is completed.

6 (1) The portion of subsection 18(8) of the Regulations before paragraph (a) is replaced by the following:

Heavy-duty engines

(8) For the purposes of paragraph (3)(b), all heavy-duty engines of a fleet must be of the same engine family or engine subfamily, as the case may be, and have, taking into account section 205(e) of Title 40, chapter I, subchapter U, part 1036, subpart C, of the CFR,

(2) Subsection 18(9) of the Regulations is replaced by the following:

Engines not sold in United States

(9) For the purposes of subsection (8), the CO₂ family certification level and the N₂O and CH₄ family emission limits for the model year in question are determined using the engine sales in Canada if none of the engines in the engine family or engine subfamily, as the case may be, are sold in the United States.

7 (1) Paragraph 26(2)(b) of the Regulations is replaced by the following:

• (b) in the case of vocational vehicles and incomplete vocational vehicles of the 2021 model year or a subsequent model year, using the applicable regulatory subcategory in accordance with section 150(z) of Title 40, chapter I, subchapter U, part 1037, subpart B, of the CFR; and

(2) Subsection 26(2.2) of the Regulations is replaced by the following:

Electric vehicles or fuel cell vehicles powered by hydrogen

(2.2) For the purposes of this section and sections 34 to 47, the CO₂ emission rate of vocational vehicles and incomplete vocational vehicles of the 2021 model year or a subsequent model year that are electric vehicles or fuel cell vehicles powered by hydrogen is zero grams of CO₂ per short ton-mile.

8 Subsection 27(4) of the Regulations is replaced by the following:

Electric vehicles or fuel cell vehicles powered by hydrogen

(4) For the purposes of this section and sections 34 to 47, the CO₂ emission rate of tractors and incomplete tractors of the 2021 model year or a subsequent model year that are electric vehicles or fuel cell vehicles powered by hydrogen is zero grams of CO₂ per short ton-mile.

9 (1) The portion of subsection 32(1) of the Regulations before paragraph (a) is replaced by the following:

Value

32 (1) The CO₂ emission value for the following heavy-duty engines corresponds to the emission value of the tested engine configuration referred to in section 235(a) of Title 40, chapter I, subchapter U, part 1036, subpart C, of the CFR for the engine family or engine subfamily, as the case may be, measured in accordance with the following duty cycles, taking into account sections 108(d) to (f) and 150(g) and (m) of subpart B, sections 235(b) and 241(c) and (d) of subpart C and subparts E and F of Title 40, chapter I, subchapter U, part 1036, of the CFR:

(2) Subsection 32(2) of the Regulations is replaced by the following:

Engine configuration

(2) For the purposes of subsection (1), the tested engine configuration for the model year in question is determined using the engine sales in Canada if none of the engines of the engine family or engine subfamily, as the case may be, are sold in the United States.

10 Paragraph 51(2)(d) of the Regulations is replaced by the following:

• (d) for each engine configuration, the fuel map results and other information described in section 503 of Title 40, chapter I, subchapter U, part 1036, subpart F, of the CFR.

Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations

11 (1) Subparagraph (c)(i) of the definition emission family in subsection 1(1) of the Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations ^{footnote 4} is replaced by the following:

• (i) in the case of mobile compression-ignition engines — other than those referred to in subparagraph (iii) — and large spark-ignition engines that meet the alternative standards referred to in section 19 of these Regulations, section 230, subpart C, of CFR 1039 and, if the engine conforms to the alternative standards referred to in section 14 of these Regulations, section 645(c), subpart G, of CFR 1039,

(2) Clauses (c)(ii)(A) and (B) of the definition emission family in subsection 1(1) of the Regulations are replaced by the following:

• (A) more than 10 L, section 230, subpart C, of CFR 1042 or, in the case of an engine that conforms to the alternative standards referred to in subsection 16(1) or (3) of these Regulations, section 204(a) to (c), of subpart C, of CFR 94, and
• (B) 10 L or less, section 230, subpart C, of CFR 1039 or, in the case of an engine that conforms to the alternative standards referred to in subsection 16(1) or (3) of these Regulations, section 116(a) to (d), of subpart B, of CFR 89,

(3) Subparagraph (c)(iv) of the definition emission family in subsection 1(1) of the Regulations is replaced by the following:

• (iv) in the case of large spark-ignition engines — other than those that meet the alternative standards referred to in section 19 of these Regulations — section 230, subpart C, of CFR 1048; or

12 Paragraphs 18(5)(a) and (b) of the French version of the Regulations are replaced by the following:

• a) dans le cas des normes prévues aux alinéas (1)a) et b) et aux paragraphes (3) et (4) du présent règlement, à l’article 101(g) de la sous-partie B du CFR 1048;
• b) dans le cas des normes prévues à l’alinéa (1)c) du présent règlement, à l’article 105 de la sous-partie B du CFR 1048.

13 The portion of subsection 28(1) of the Regulations before paragraph (a) is replaced by the following:

Label — compression-ignition engines

28 (1) A compression-ignition engine or a large spark-ignition engine that meets the alternative standards referred to in section 19 — other than an engine that is covered by an EPA certificate, an engine that is used in a transportation refrigeration unit and that conforms to the alternative standards referred to in subsection 14(1) or a replacement engine — must bear a label that sets out

14 The portion of subsection 29(1) of the Regulations before paragraph (a) is replaced by the following:

Label — large spark-ignition engines

29 (1) A large spark-ignition engine — other than an engine that meets the alternative standards referred to in section 19, an engine that is covered by an EPA certificate or a replacement engine — must bear a label that sets out

15 Paragraph 32(c) of the Regulations is amended by striking out “or” at the end of subparagraph (i), by replacing “and” with “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):

• (iii) in the case of an engine that is covered by an EPA certificate issued under CFR 1039, sections 135(b) to (g), subpart B, of CFR 1039, and,
  • (A) if the engine is equipped with adjustable parameters and is designed to operate using fuel that is not generally offered for sale in Canada, section 615(b)(2), subpart G, of CFR 1039, and
  • (B) if the engine is used in a transportation refrigeration unit, section 645(d)(1), subpart G, of CFR 1039; and

16 (1) Paragraph 36(1)(a) of the Regulations is replaced by the following:

• (a) in the case of a mobile compression-ignition engine or a large spark-ignition engine covered by an EPA certificate issued under CFR 1039 or a large spark-ignition engine that meets the alternative standards referred to in section 19 of these Regulations, section 109(a), subpart B, of CFR 89 or sections 125(a) to (d) and (f), subpart B, of CFR 1039, as the case may be;

(2) Paragraph 36(1)(c) of the Regulations is replaced by the following:

• (c) in the case of a large spark-ignition engine, other than an engine that is covered by an EPA certificate issued under CFR 1039 or an engine that meets the alternative standards referred to in section 19 of these Regulations, sections 125(a) to (d) and (f), subpart B, of CFR 1048.

Coming into Force

17 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.)

Issues

On June 29, 2021, the United States Environmental Protection Agency (U.S. EPA) published a Final Rule in the Federal Register, entitled Improvements for Heavy-Duty Engine and Vehicle Test Procedures, and Other Technical Amendments. This Final Rule introduces technical amendments to the U.S. EPA emission regulations to modify existing test procedures and other provisions for vehicles and engines found in the U.S. Code of Federal Regulations (CFR).^{footnote 5} The U.S. technical amendments improve accuracy, reduce the testing burden, and make a number of housekeeping changes to the CFR, such as removing obsolete provisions and renumbering provisions within the regulatory text. While most of the technical amendments in the U.S. EPA Final Rule apply to on-road heavy-duty vehicles and engines, it also covers light-duty vehicles, highway motorcycles, marine engines, other off-road vehicles and engines, and stationary engines.

The Canadian vehicle and engine emission regulations are aligned with the U.S. EPA emission regulations. Without regulatory action to maintain alignment, discrepancies between the Canadian provisions and the corresponding CFR provisions could affect how manufacturers and importers comply with the Canadian vehicle and engine emission regulations, starting with the 2022 model year and beyond. In some cases, there could be an increased regulatory burden for companies operating in the Canada–U.S. market. For example, discrepancies between certain definitions in the CFR and the Canadian regulations could change the regulatory classification of certain vehicles. As a result, Canadian companies could be required to submit additional documentation prior to importation or sale of vehicles that already meet equivalent standards in the U.S. market.

Background

Under the framework of the Canada–U.S. Air Quality Agreement, Canada has been working closely with the U.S. EPA and has a long history of aligning vehicle and engine emission standards as a means of reducing transboundary air pollution. The 2000 Ozone Annex to the Canada–U.S. Air Quality Agreement included specific obligations for the Government of Canada to align with emission standards for vehicles and engines established by the Government of the United States (as represented by the U.S. EPA). Since 2003, the Canadian Department of the Environment (the Department) has introduced a range of standards to reduce air pollutants as well as greenhouse gas emissions within a suite of on-road and off-road vehicle and engine emission regulations, which align with the corresponding standards and test procedures of the U.S. EPA.

The Department and the U.S. EPA collaborate closely by identifying joint strategic priorities in an effort to implement aligned regulatory standards and joint compliance verification programs, which help maximize efficiencies in the administration of the respective vehicle and engine programs in the two countries. For example, the Department of Transport, the National Research Council and the Department have worked collaboratively with the U.S. EPA during the development of the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations by conducting aerodynamic and chassis dynamometer emissions testing.

The Canadian vehicle and engine emission regulations help protect Canadians and the environment from the effects of climate change and adverse environmental and human health impacts resulting from harmful air pollutants, and are aligned with the U.S. EPA emission regulations. In order to efficiently align with the U.S. EPA, incorporation by reference is used in the Canadian vehicle and engine emission regulations as a technique to integrate certain provisions from the CFR, such as emission standards and test procedures. However, it is not possible to include all relevant provisions from the CFR using incorporation by reference. Therefore, the Government is undertaking regulatory action to maintain alignment with the recently amended provisions in the U.S. EPA Final Rule and other provisions of the CFR. Four of the Canadian vehicle and engine emission regulations would be misaligned without regulatory action and they are described below.

Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations

The Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations were published in the Canada Gazette, Part II, on March 13, 2013, and set performance-based greenhouse gas emission standards for heavy-duty vehicles and engines of the 2014 model year and subsequent model years. These Regulations apply to the entire range of on-road heavy-duty vehicles, from full-size pick-up trucks and vans to transport tractors manufactured primarily for hauling trailers, including a wide variety of specialized (vocational) vehicles, such as school, transit and intercity buses, and freight, delivery, service, cement, garbage and dump trucks. In 2018, these Regulations were amended to establish increasingly more stringent greenhouse gas emission standards that begin with the 2021 model year for on-road heavy-duty vehicles and engines.

On-Road Vehicle and Engine Emission Regulations

The On-Road Vehicle and Engine Emission Regulations were published in the Canada Gazette, Part II, on January 1, 2003, and set air pollutant emission standards for new on-road vehicles, such as passenger cars, light-duty trucks, motorcycles, heavy-duty vehicles and their engines, beginning with the 2004 model year. These Regulations were subsequently amended in 2006, 2013, 2015, and more recently in 2018, generally to increase the stringency of emission standards.

Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations

The Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations were published in the Canada Gazette, Part II, on February 16, 2011, and amended in 2017. These Regulations set air pollutant emission standards and apply to new engines of the 2012 and later model years, such as outboard motors, personal watercraft and sterndrive or inboard motors, as well as to off-road recreational vehicles, such as all-terrain vehicles, snowmobiles, off-road motorcycles, and utility vehicles.

Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations

The Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations were published in the Canada Gazette, Part II, on December 23, 2020, and set performance-based emission standards for air pollutants from new off-road diesel engines and large spark-ignition engines. Mobile diesel engines are typically found in machines used in construction, mining, farming, and forestry applications. Stationary diesel engines are commonly used to provide electricity in remote communities, to power industrial equipment, and as backup or emergency sources of power for buildings. Large spark-ignition engines are typically used in machines such as forklifts, ice resurfacers, small generators and other specialty equipment.

Objective

The objective of the Regulations Amending Certain Regulations Made Under the Canadian Environmental Protection Act, 1999 (herein referred to as the Amendments) is to maintain alignment with the recent technical amendments published in the United States and with other provisions of the CFR. Maintaining alignment with U.S. EPA emission standards for vehicles and engines will minimize the overall regulatory burden for companies operating in the Canada–U.S. market and maintain fair regulatory conditions for importers and manufacturers.

Description

The Amendments will make the necessary modifications to three of the vehicle and engine emission regulations made under the Canadian Environmental Protection Act, 1999 (CEPA) to maintain alignment with the corresponding technical amendments made by the U.S. EPA in its Final Rule. These changes include modifying definitions and regulatory text and updating some references to the CFR. All other changes made by the U.S. EPA in its technical amendments that are not part of the Amendments, and as such are not described below, automatically apply in Canada because they are incorporated by reference in the various vehicle and engine emission regulations. The regulations affected by the changes in the U.S. EPA technical amendments are the following:

• the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations;
• the On-Road Vehicle and Engine Emission Regulations; and
• the Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations.

In addition, the Amendments will make modifications to the Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations to correct a regulatory misalignment with the CFR provisions related to certain large spark-ignition engines, by updating requirements such as definitions, labelling, and maintenance instructions. These changes are not related to the technical amendments from the U.S. EPA Final Rule.

The vehicle and engine emission regulations modified by the Amendments are identified below, along with a description of the modifications to the Canadian regulatory text. The Amendments will affect companies that manufacture or import new vehicles and engines for sale in Canada and that are subject to the regulations mentioned below.

Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations

The Amendments will modify definitions in the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations, as follows:

• A “heavy-duty vehicle” is currently defined as an on-road vehicle that has a gross vehicle weight rating (GVWR) of more than 3 856 kg (8 500 pounds), a curb weight of more than 2 722 kg (6 000 pounds) or a basic vehicle frontal area in excess of 4.2 m² (45 square feet). The Amendments will make the necessary changes so a “heavy-duty vehicle” will only be defined as an on-road vehicle that has a GVWR of more than 3 856 kg (8 500 pounds), removing the two other criteria. This change is to ensure that hybrid light-duty trucks do not fall under this definition and are subject to the emission standards pertaining to light-duty vehicles, as hybridization could lead to an increase in curb weight.
• The definition of “heavy-duty incomplete vehicle” will be amended to clarify that a heavy-duty incomplete vehicle is still characterized as an on-road vehicle that meets the GVWR requirements of a heavy-duty vehicle, has a curb weight of more than 2 722 kg (6 000 pounds), or has a basic vehicle frontal area in excess of 4.2 m² (45 square feet). This provides the regulated companies with the option to choose the appropriate vehicle classification for compliance during manufacturing. As such, the changes to the definition of “heavy-duty incomplete vehicle” ensure that what constitutes a heavy-duty incomplete vehicle will remain unchanged given the changes to the definition of “heavy-duty vehicle” described above.
• The definitions of “heavy heavy-duty vehicle” and “medium heavy-duty vehicle” will be amended to ensure that electric, fuel cell or hybrid vocational vehicles are grouped with their correct class of vehicle under the Regulations for the 2021 and subsequent model years to reflect the changes made in the U.S. EPA technical amendments. Under the current Regulations, all electric, fuel cell or hybrid vocational vehicles of classes 6 to 8 would be considered medium heavy-duty vehicles since they are not equipped with a heavy heavy-duty engine. This may not be representative of the application for electric, fuel cell or hybrid vocational vehicles of class 8, which would be considered a heavy heavy-duty vehicle if they were equipped with such an engine.

Furthermore, the U.S. EPA modified its model year definition to allow regulated companies to make the model year for a vehicle one year later than the calendar year during which the vehicle’s main assembly is completed. This change was made to provide some flexibility, such as when the engine installed in the vehicle is of one model year later due to production periods. The Amendments will make the corresponding changes to the relevant provisions of these Regulations to allow for that flexibility in Canada.

With respect to engines, the U.S. EPA now allows regulated companies to divide engine families into subfamilies for compliance with the CO₂ standards. This allowance is aimed at simplifying the certification process in the United States without changing the overall requirements. The Canadian regulations include a system of emission credits to help meet overall environmental objectives in a manner that provides the regulated industry with compliance flexibility.^{footnote 6} In order to participate in this CO₂ emission credit system, a company must group its vehicles and engines into fleets and calculate its emission credits and deficits. The grouping in fleets is aligned with the compliance grouping of the U.S. EPA certification process. As such, the Amendments will make the necessary modifications to allow companies to have fleets that are of the same engine subfamilies as in the United States. This will allow similar flexibility for Canadian companies using the CO₂ emission credit system.

The U.S. EPA has clarified that hydrogen fuel cell vehicles can also be assumed to have an emission of zero grams of CO₂ per short ton-mile, much like electric vehicles. As such, the Amendments will add the definition of “fuel cell vehicle,” modify the definition of “electric vehicle” and make corresponding changes to the relevant provisions for vocational vehicles and tractors to ensure that this change made by the U.S. EPA to hydrogen fuel cell vehicles is reflected in the Canadian regulations.

In addition, the Amendments will update a reference to the CFR that was renumbered in the U.S. regulatory text related to engine fuel map documentation to ensure that the incorporation by reference in the Canadian regulations is maintained and other regulatory wording to maintain alignment will be updated.

On-Road Vehicle and Engine Emission Regulations

The Amendments will make minor modifications to the On-Road Vehicle and Engine Emission Regulations to ensure consistency with the modifications mentioned above to the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations and corresponding provisions in the United States, namely modifying the definitions of “heavy-duty vehicle” and “light-duty truck.” The changes to the definition of “heavy-duty vehicle” will ensure that the definitions are the same in both regulations. While a light-duty truck is not defined in the Heavy-duty Vehicle and Engine Greenhouse Gas Emission Regulations, this definition is found in the on-road emission regulations and will be amended to ensure that a light-duty truck is not characterized as a heavy-duty vehicle as a consequence of the changes made to that definition.

Marine Spark-Ignition Engine, Vessel and Off-road Recreational Vehicle Emission Regulations

The Amendments will update a reference to the CFR that was renumbered in the U.S. regulatory text related to replacement engine labelling in order for the incorporation by reference in the Canadian regulations to point to the corresponding provision of the U.S. EPA regulations.

Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations

The Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations allow large spark-ignition engines fuelled solely by natural gas or liquefied petroleum gas and with a maximum engine power at or above 250 kW to meet alternate standards, namely the standards applicable to mobile compression-ignition engines. In this case, these Regulations only refer to emission standards, but should include additional requirements, such as labelling and maintenance instructions. To ensure alignment with the corresponding standards and provisions in the CFR, the Amendments will modify the regulatory text with respect to assignment of emission families, labelling requirements, and maintenance instructions requirements for these specific large spark-ignition engines meeting these alternate standards. The Amendments include the following modifications for these specific large spark-ignition engines:

• The definition of “emission family” will be updated to ensure that large spark-ignition engines meeting the alternate standards and certified in the United States under section 1039 of the CFR will be eligible for import into Canada and be recognized as compression-ignition engines meeting those requirements.
• Labelling requirements will be amended to allow large spark-ignition engines meeting the alternate standards to be labelled as a compression-ignition engine, either with a U.S. EPA emission control information label or with a Canadian label.
• Maintenance instruction requirements will be amended to allow large spark-ignition engines meeting the alternate standards to be subject to the maintenance instructions provision for compression-ignition engines.

Regulatory development

Consultation

The Amendments will affect companies engaged in the business of manufacturing or importing vehicles and engines subject to the regulations listed in the “Description” section above. The Department meets regularly with industry associations to provide updates on its regulatory agenda for vehicle and engine emission regulations, either through the associations’ annual conferences or during recurrent meetings.

During 2020 and 2021, departmental officials met bilaterally with some of the industry associations to inform them of the Department’s intent to amend several of the Canadian vehicle and engine emission regulations to maintain alignment with U.S. EPA’s technical amendments. During these meetings, industry stakeholders did not express concerns and sought feedback on the timing of the alignment effort in order to ensure that the regulatory gap between the Canadian and U.S. regulations would be minimized.

The proposed Amendments were published in the Canada Gazette, Part I, on December 18, 2021, and initiated a 75-day public comment period during which interested parties were invited to submit their written comments. The proposed Amendments were also posted on the CEPA Environmental Registry to make them broadly available to stakeholders. In addition, the Department sent an email to all known stakeholders, including provincial and territorial governments, Indigenous leadership groups, industry associations, and non-governmental organizations, to inform them of the formal consultation process.

The Department also sent a notification to the Assembly of First Nations, the Métis National Council and the CEPA National Advisory Committee (NAC) to inform the members of these groups of the release of the proposed Amendments and the opportunity to submit written comments.

The Department held a bilingual webinar information session on February 23, 2022, to present an overview of the proposed Amendments and to answer stakeholder questions. The session was attended by approximately 150 participants.

During the 75-day public comment period, the Department received five submissions from one manufacturer, three industry associations, and one Indigenous group. Overall, stakeholders expressed support for the Department’s initiative to maintain alignment with the corresponding U.S. EPA regulations. The Department held follow-up discussions with those stakeholders that raised technical issues in their comments, including an industry association, a manufacturer, and an Indigenous group. Lastly, the Department met with counterparts at the U.S. EPA to discuss several comments and to ensure that the Amendments are closely aligned with their provisions in the CFR.

All comments were taken into consideration during the development of the Amendments. The following paragraphs summarize the main technical comments submitted by stakeholders and the resulting changes made to the Amendments.

Fuel cell vehicles

One industry association requested that the Department assess if the changes to the definitions of “heavy heavy-duty vehicle” and “medium heavy-duty vehicle” should also include fuel cell vehicles, since these vehicles are also not equipped with a heavy heavy-duty engine in the same way as for an electric or a hybrid vocational vehicle. The Department agreed with this consideration and made changes to the proposed definitions to include fuel cell vehicles in the definitions of the Amendments.

Engines used in underground mines

A manufacturer requested that the Department expand the current scope of the exclusion for engines used in underground mines in the Off-road Compression-Ignition (Mobile and Stationary) and Large Spark-Ignition Engine Emission Regulations. This comment was related to ongoing discussions between the Department and the stakeholder and is outside of the scope of the Amendments. Consequently, no regulatory changes are being made at this time.

Off-road equipment in the oil sands

One Indigenous group submitted a report containing data, comments, and recommendations related to emissions from nearby oil sands due to the use of large off-road equipment and the impact on air quality. These comments are outside of the scope of the Amendments and, as such, no regulatory changes are being made in response to these comments at this time. However, the issue is relevant to other initiatives in the Department and the report was shared with the appropriate groups in the Department for their consideration.

Modern treaty obligations and Indigenous engagement and consultation

An Assessment of Modern Treaty Implications (AMTI) was completed as per the Cabinet Directive on the Federal Approach to Modern Treaty Implementation, and no modern treaty implications were identified. An initial assessment examined the geographical scope and subject matter of the Amendments in relation to modern treaties currently in effect, and it was found that the Amendments are not expected to have any modern treaty implications because the Amendments do not impact people or land use. As a result, a detailed assessment is not required.

The Amendments are not anticipated to impact Indigenous peoples. As a result, specific Indigenous engagement and consultation have not been undertaken. Following publication of the proposed Amendments in the Canada Gazette, Part I, the Department informed Indigenous groups, including the Assembly of First Nations and the Métis National Council, of the publication and invited them to submit comments and participate in the stakeholder engagement webinar. One submission was received from an Indigenous group and is detailed above in the “Consultation” section.

Instrument choice

The objective of these Amendments is to maintain alignment with corresponding vehicle and engine emission regulations in the United States. The only way to achieve this objective is by amending several of the current Canadian vehicle and engine emission regulations. No other instrument type would be appropriate in this case.

Regulatory analysis

Benefits and costs

The Canadian vehicle and engine manufacturing industries are highly integrated with the corresponding industries in the United States. Maintaining alignment with common Canada–U.S. standards and testing procedures will contribute to a level playing field for these industries and provide regulatory certainty to stakeholders. The benefits of the Amendments will be realized by eliminating regulatory misalignment with the U.S. EPA provisions. This will reduce the overall regulatory burden for companies operating in the Canada–U.S. market by eliminating the need for additional efforts to meet similar administrative requirements in each jurisdiction. It is estimated that the benefits associated with environmental impact reductions will be greatest when aligning with U.S. EPA standards, which is a cost-effective method for Canada to achieve its emission reduction objectives consistent with the 2000 Ozone Annex to the Canada–U.S. Air Quality Agreement.

The Amendments will only make minor technical changes and their impact on regulated companies is expected to be minimal, because the current regulatory framework will remain the same. For regulated companies, the Amendments are not expected to create additional compliance costs, because the changes will avoid having different requirements for Canada and the United States.

In its analysis for the Final Rule, the U.S. EPA stated that its modifications are technical and will not have significant environmental impacts nor significant economic impacts for any sector. Likewise, the implementation of similar technical changes in Canada is not anticipated to have adverse economic or environmental impacts in Canada. The Amendments will not affect the stringency of emission standards and no change in greenhouse gas or other air pollutant emissions is expected.

The Amendments are not expected to create any added government costs beyond the need to make stakeholders aware of the Amendments because the current regulatory framework will remain the same and the existing implementation, compliance, and enforcement policies and programs will continue to apply.

Small business lens

The Amendments will not result in new costs for businesses, including small businesses. Re-establishing alignment with U.S. EPA will avoid the potential for added burden on businesses, including small businesses, by eliminating additional efforts needed to comply with similar requirements in Canada and the United States.

One-for-one rule

The one-for-one rule does not apply to the Amendments because there will be no net increase or decrease in administrative burden and no new regulatory titles will be introduced or repealed. Minimal effort will be needed to become familiar with the Amendments; however, this effort will not be related to requirements necessary to demonstrate compliance with the Amendments, and for the purposes of the one-for-one rule, it is not considered administrative burden.

Regulatory cooperation and alignment

The Amendments will align with the changes introduced by the recent U.S. EPA technical amendments and other provisions of the CFR, and will thus be consistent with the commitment set out in the Canada–U.S. Air Quality Agreement. Stakeholders have also expressed the need to maintain alignment with the U.S. EPA due to the highly integrated nature of the North American market. This harmonized approach provides regulatory certainty for companies in Canada and the United States by creating a level playing field to comply with the same standards, while minimizing regulatory burden for the Department and industry.

The Department is working closely with the U.S. EPA to maintain, where possible, a common Canada–U.S. approach to regulating emissions from vehicles and engines. The cooperative efforts include information-sharing, technical work-sharing, scientific collaboration, and testing related to vehicle and engine emissions. The Department and the U.S. EPA continue to share knowledge and collaborate closely in an effort to implement aligned regulatory standards and joint compliance verification programs, which help maximize efficiencies in the administration of the respective programs in the two countries.

In February 2021, the United States and Canada launched the Roadmap for a Renewed U.S.-Canada Partnership, which was followed by the U.S.-Canada High level Ministerial Dialogue on Climate Ambition, where bilateral cooperation is sought to increase ambition aligned to the Paris Agreement and net-zero objectives, which include exploring opportunities to align policies and regulations. While the Amendments will not change the stringency of the emission standards set out in the amended regulations, maintaining alignment with the emission regulations and associated test procedures of the U.S. EPA is consistent with that objective.

Strategic environmental assessment

The Amendments are intended to maintain alignment with recent changes put in place by the U.S. EPA and there are no changes to the stringency of the amended regulations. Consequently, there are no expected changes to the estimated emission reductions from these regulations, and thus no incremental environmental impacts are expected. In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

No gender-based analysis plus (GBA+) impacts have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

Since the Amendments will not make substantive changes to the existing regulations nor their stringencies, they will not result in new policies and programs. The existing implementation, compliance and enforcement policies and programs, which include maintaining a departmental website containing guidance material, and responding to inquiries from stakeholders, will continue to apply.

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

Contacts

Stéphane Couroux
Director
Transportation Division
Energy and Transportation Directorate
Environmental Protection Branch
Environment and Climate Change Canada
351 Saint-Joseph Boulevard
Gatineau, Quebec
K1A 0H3
Email: ec.apregdevinfo-infodevregpa.ec@ec.gc.ca

Matthew Watkinson
Director
Regulatory Analysis and Valuation Division
Economic Analysis Directorate
Strategic Policy Branch
Environment and Climate Change Canada
200 Sacré-Cœur Boulevard
Gatineau, Quebec
K1A 0H3
Email: RAVD.DARV@ec.gc.ca