Regulatory Harmonization, or Not: A Constant Preoccupation

In the last edition of CFCM I provided an update on the ongoing effort by Canada and the United States, under the Regulatory Cooperation Council (RCC) to harmonize regulations given the fact that our two countries represent the largest trading relationship in the world. That piece focused on the new Globally Harmonized System (GHS) for Chemicals in the Workplace, transportation of dangerous goods, product approvals for health and workplace chemicals, and particulate matter and good manufacturing practices. Below we look at other issues that continue to preoccupy members in the paint and coatings industry on both sides of the border, some operating in both countries and others operating in one or the other. In both cases, the need to focus on regulations in both countries is a critical part of doing business.

Nanotechnology

The paint and coatings industry recently began a focused effort to establish consistent or emerging treatment for nanotechnology, working through the International Paint and Printing Ink Council (IPPIC), of which CPCA is a longstanding member. CPCA believes it is critical for the Regulatory Cooperation Council (RCC), created by Canada and the United States to align regulations between our two countries, to promote the establishment of a common approach and workable and consistent definitions for nanotechnology matters.  This effort could be directed at both the U.S. and Canadian standards organizations working to ensure the issue is appropriately addressed.

CPCA applauds the past RCC initiative related to nanomaterials in the first Action Plan that led to the development of metrics on current or potential uses; and of a classification scheme and informed discussions surrounding a risk assessment and risk management approach by both governments and industry stakeholders. Part of this cooperation was also meant to establish prioritization of issues such as the identification of nanomaterials. It is understandable that the RCC nanotechnology initiative has progressed well with the full engagement of government and industry stakeholders.

The continuation of RCC initiatives with respect to nanomaterials and nanotechnology will help ensure further alignment and cooperation in the years to come. It will also be critical in the future with respect to many other regulatory initiatives in the international community. The listing of substances in the nano-form per the Toxic Substances Control Act (TSCA) and the New Chemicals Program in the U.S., as well as in the Domestic Substances List (DSL) and the New Domestic Substances List (NDSL) in Canada, remain a challenge with respect to unique identification – a common concern for both countries. The paint and coatings industry is pleased that the RCC is seeking to address this important initiative. CPCA recommended that the RCC share information, and develop joint approaches, on regulatory aspects of nanomaterials, including terminology and nomenclature, as well as risk assessment and management. See CPCA’s formal submission to the RCC in the Members Only section: www.canpaint.com.

Non-Alignment of PMRA List with the US EPA List

There are several areas wherein non-alignment currently exists for certain products and the coatings industry looks forward to those being addressed in future action plans of the RCC. For example, the paint and coatings industry uses biocides and fungicides in paint formulations in order to ensure adequate conditions for transportation and storage of paint products, as well as preventing biopic growth on applied products. However, there is currently a divergence between the Pest Management Regulatory Agency (PRMA) list of registered products and the U.S. EPA list. In the U.S., biocidal/antimicrobial products are subject to product registration requirements under the EPA’s Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA). In Canada, biocidal/antimicrobial product registration is ensured by the PMRA (Pest Management Regulatory Agency). Canadian paint manufacturers have informed CPCA that inadequacies between the two lists of registered products cause problems. It must be noted that approval timelines established by the PMRA for biocidal products in Canada are extremely long even for products already approved and registered in the U.S. The PMRA approves fewer biocides than in the U.S. and, moreover, the sale price appears to be twice as much in Canada than in the U.S. The considerably larger range of biocides allowed in the U.S. is not only more affordable, but their imports into Canada in finished products are allowed without restriction, hence putting Canadian manufacturing at a real cost disadvantage with respect to U.S. exporters.

Differences Between US EPA and Canadian VOC Exclusion Lists

There have been notable differences between the two VOC exclusion lists in Canada and the USA over the past 10 years. The lists have not been reviewed and updated at the same pace. In Canada, following a long examination process soliciting the requisite approvals within several federal government departments, at various decision levels, led to a recent proposal by Environment Canada to add 13 new compounds to the VOC-exclusion list under Schedule I of CEPA, 1999. Our industry has long sought such an initiative and is fully supportive of these new additions, especially with respect to three compounds widely used in paint and coatings. Due to inconsistencies between the two countries’ VOC-exclusion lists, our paint manufacturer members do not have access to the same VOC-content lowering strategies as US formulators. They have therefore been at a disadvantage with respect to compliance with Canadian regulations modeled on US VOC regulations. As well, U.S. producers have experienced difficulties in the stock management of their VOC-compliant products in the U.S. (but not in Canada) that needed to cross the border for sale in Canada.

CPCA recommended further collaboration between the U.S. EPA and Environment Canada (and all related Canadian departments) to ensure that any future intent to modify the VOC-exclusion list be addressed in a more synchronized manner. Also, there needs to be efficient mechanisms put in place to facilitate and accelerate the exchange of information and coordination between all U.S. and Canadian regulatory agencies with respect to future chemicals vis-à-vis the exclusion list. The development of such mechanisms via a streamlined regulatory regime would help exemplify how to prevent such unnecessary regulatory misalignments in a similar regulatory context in future.

Chemical Management of CMP-Declared Toxics

CPCA believes that there should be a more concerted effort and definitive actions taken with respect to the risk management of certain toxics or suspected toxics being currently addressed in Canada. The U.S. EPA could benefit from employing a non-REACH approach, such as the CMP approach currently underway in Canada and certainly not from other approaches adopted by several states and in the Province of Ontario with respect to toxic reduction hazard-based regulatory programs. The CMP risk-based approach has been lauded by other countries for its science-based, reasoned framework to the benefit of government and industry, as well as the public in general. The U.S. EPA has already identified a list of priority chemicals, which comprise common substances similar to the CMP list of chemicals in commerce, but with a different process and timetable.

There are also ongoing discussions with respect to possible actions by Environment Canada related to thousands of existing substances – or family of substances under the CMP – that are no longer in commerce in Canada, but may be suspected of toxicity in all or specific uses with or without established thresholds. Canadian companies do not want these substances to be removed from the Domestic Substances List (DSL) completely or be subject to New Substances Requirements, as they may indeed be used again in future industrial settings requiring no further restriction, unless they are removed. There must be some coordination with the U.S. EPA with respect to the risk management of the hundreds of DSL substances, during and beyond their assessment period in Canada, as they will remain freely accessible to U.S. formulators. This must be done to ensure a level playing field and to ensure that companies can operate their businesses in similar fashion on both sides of the border.

It is well known that the Domestic Substances Lists in Canada and the U.S. are very different (with more than 84,000 substances in the TSCA Inventory against approximately 24,000 substances in Canada). Can Canada adopt an ICL process and related deliverables for these CMP-2 and CMP-3 DSL substances that are no longer in commerce? Or, will Canadian companies be subject to massive Significant New Activity (SNAC) processes, which will render the tracking of allowable and non-allowable substances in Canada ‘considerably’ more difficult for both Canadian and U.S. companies doing business in Canada? This particular issue is very likely the future fate of thousands of domestic substances in Canada if not addressed by the RCC through enhanced technical data sharing and scientific collaboration between the two countries.

Industry fully expects that there will be an increasing number of actions flowing from CMP (Phase 2 and 3 assessments) until 2020 and beyond, such as: codes of practices, guidelines, pollution prevention plans, environmental compliance agreements and significant new activity (SNAc) restrictions. Under such a scenario both governments need to improve or review their conformity assessment approach and intervention processes to ensure better alignment with respect to current approval mechanisms. These issues will definitely result from ongoing government inspections of imported products in the context of an expected increase of different mandatory (multi-substances) and non-mandatory control instruments.

Management of Third Country Import Risk

The concept of coordination of import programs and information sharing with respect to third country technical requirements might be considered for RCC’s next Action Plan. Increasing reliance on third country technical assessments and inspection work could greatly facilitate trade at the ‘first point of entry’ into Canada or the U.S. This would, of course, include Mexico as part of NAFTA.

Increased collaboration between regulatory agencies in Canada and the U.S. will help reduce unnecessary duplication of costs for manufacturers, streamline decision-making, and minimize the delays in bringing products to the marketplace. This will result in expanded consumer choices without compromising the safety, efficacy and quality of products in the paint and coatings industry.