Federal Legislation and Regulation Ramping Up
There are many regulations now flowing from the federal Government, which the coatings industry, and many others, will have to deal with in the weeks and months ahead. CPCA members have spent a lot of time and effort to address many issues related to the assessment of chemicals in Canada used in literally thousands of products. Now the federal government is moving forward quickly on amending the Canadian Environmental Protection Act (CEPA, 1999). Among other things, CEPA governs everything related to chemical assessment and risk management instruments flowing from those assessments such as pollution prevention plans and regulations. The proposed amendments to the Act require the federal Government to “implement a framework of how principles of environmental justice will be considered and balanced with social, economic and scientific factors.” The Act is expected to be amended by the end of 2023 or early in 2024.
More than 500 substances used in coatings, adhesives, sealants and elastomers (CASE) were risk-assessed over the past five years under Canada’s Chemicals Management Plan and more than 1200 in two previous rounds. Risk Assessment is not currently codified the Act, but the plan is to codify it in this current round of amendments. It’s not clear what that will mean for the assessment of chemicals for CASE, if anything. However, industry has maintained all along that a risk-based approach must be the way forward on chemical assessment. If codifying it in the Act helps cement that approach in stone, then fine. But, if the definition of risk assessment is altered significantly it may mean a backward step for chemical assessment in Canada. CPCA and the industry generally must be vigilant on how the proposed amendments play out as it will impact chemical assessment and the decisions made on use chemical use restrictions and bans.
In terms of the current ongoing assessment of chemicals, the coatings industry remains concerned with the high frequency of federal Government consultations under Canada’s Chemicals Management Plan. This is somewhat worrying for CPCA member companies given the current economic climate and the long-lasting effects of the pandemic. The global chemical manufacturing sector is currently experiencing significant supply chain disruptions and severe raw material shortages resulting from a combination of factors precipitated by the COVID-19 pandemic. This has led to increased shipping and freight delays resulting from a high demand for manufactured items.
A recent report on the economic outlook for the paint and coatings sector found that raw material prices were up an average of 26% in 2021 and 34% in Q4 versus Q4 2020. Freight and trucking costs continue to increase as well, up nearly 20%. As the world begins to gradually recover from the initial impact of the pandemic, the outlook for supply chain issues is mixed. Base chemical supply materials and pricing appears to be slowly improving, but trade indicators still predict levels well below pre-Covid norms. Although supply chain issues will gradually improve, recovery will still be slow and could be interrupted by further waves of the pandemic or economic fallout from it.
These disruptions have consumed a significant portion of our members’ resources over the past two years. Product formulators in all companies, both large and small, are dealing with long delays for key raw materials, lab equipment, and needed accessories, all of which negatively impact entire production lines, inventory, and distribution. Adding extensive consultations and demands for data on industry only adds to the strain. For example, CPCA and its members, are currently engaged in several consultations with federal government departments, which impact the coatings sector directly as staff must be fully engaged in supplying critical data. These includes the mandatory requirement for Section 71 survey data for Bisphenol A structural analogues and functional alternatives targeting 188 substances. All have extensive time-consuming requirements placing significant burdens on the CASE industry. There are also draft screening assessments and risk management instruments being considered for the Flame Retardants group and Phenols, Methylstyrenated, for which the deadline was extended to March 2022.
Other regulatory initiatives further increase the burden substantially such as the more stringent VOC regulations proposed by the federal government for architectural coatings, increasing restrictions on plastics, the upcoming nanomaterials survey for TiO2 and zinc oxide, and new supply chain tracking requirements. Most importantly, a large portion of our members will also have to face the proposed mandatory risk management instrument for 2-butanone oxime (MEKO, CAS RN 96-29-7), a crucial anti-skinning agent for alkyd paints. All at a time when our members’ R&D resources and lab support are monopolized by numerous other supply chain issues straining their business and jobs. Depending on the outcome of these Government consultations, member companies will have to devote further resources to new product formulations or make necessary adjustments, increase research related to informed substitution, and more field testing or re-labelling to ensure that the impacted consumer products can remain on the market. We all hope that this is not the case, but hope is not a plan. Fewer products mean less choice, less competition and increased costs. In the current economic climate these activities are placing a huge strain on R&D, worker productivity, and business competitiveness and, in some cases, the mental health of employees in our sector.
Federal government consultation and engagement processes generally operate well and are incredibly valuable to our work on many Government policies and regulations. CPCA and the CASE sector, writ large, must ensure that Government officials consider all relevant feedback in its ongoing regulatory development process. It greatly impacts the CASE sector’s operations and products (eg. MEKO, flame retardants, and MSP). Providing feedback is a time consuming and resource intensive process for industry. It requires internal review of legislation, important data collection, analysis of socio-economic impacts, and external coordination among suppliers across Canada and in other jurisdictions. CPCA must work to ensure that all the available technical data is used wisely to inform evidence-based decisions for the benefit of both human health and the environment. Without such information more use restrictions or bans are assured.
For the 2022 and 2023 calendar years, CPCA asked federal Government departments to relax tight time constraints on our members related to survey and reporting requirements, provide longer consultation periods for industry, improve development/implementation timelines for risk management instruments, and fully consider extensions when necessary to ensure adequate stakeholder feedback is provided before final decisions are made. CPCA has also encouraged government departments to coordinate consultation timelines and overlaps related to policy and regulatory proposals both within their own departments and across other departments and agencies where possible.
CPCA and its members remain committed to working with the federal government to participate in regulatory development, for better health and safety of workers and all Canadians. However, this must be done without impeding innovation, investment, jobs, and economic growth. Without the latter there will be greater things to worry about in Canada.