ENSU Committee Meeting

STANDING COMMITTEE ON ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

COMITÉ PERMANENT DE L'ENVIRONNEMENT ET DU DÉVELOPPEMENT DURABLE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, June 9, 1998

• 0907

[English]

The Chairman (Mr. Charles Caccia (Davenport, Lib.)): The committee is resuming its work on Bill C-32.

Yesterday we had a very good session with Mr. Moffet, and it became clear that if the bill is to resemble the government response to the committee report, it will require a number of amendments, which will have to be taken into account a little bit later in our proceedings. But we have a better understanding as to the gap between the bill and the government response, I hope. At least those of you who were present yesterday came to a similar conclusion.

Also, I would like to draw the attention of members of the committee to a clipping from the Globe and Mail, which appeared on June 5. It is entitled “UN treaty to ban chemicals tied to Inuit health”. It is from Washington, and it's written by Barrie McKenna. I would ask the clerk to make a photocopy so that you can have it for your files.

Today, we welcome several groups: the Canadian Environment Industry Association; the Canadian Waste Alliance; Stablex Canada Inc.; and la Grappe de développement des industries de l'environnement, who are arriving by train, as good environmentalists do, and therefore we will welcome them when they arrive.

To the groups in the room, a very particular welcome by the members of the committee and myself. We have adopted a little procedure whereby you have ten minutes each, so as to give sufficient time for a question and answer period.

• 0910

Who would like to go first?

Mr. Colin Isaacs (Chair, National Policy Committee, Canadian Environment Industry Association): Mr. Chairman, I believe we have agreed that I will go first.

My name is Colin Isaacs, and I am chair of the national policy committee of the Canadian Environment Industry Association. With me is Rebecca Last, who is the director of programs and policy for the same industry association.

We have prepared a brief, which is circulated to you in the kit from the industry association. I will be attempting to summarize that brief in the time I have available.

I must apologize on behalf of the association that at this point we do not have a copy of our current brief available in French, but I'm sure that will be remedied as soon as possible.

The Chairman: What is Mr. Portelli, then, if you are the president?

Mr. Colin Isaacs: I am the chair of the national policy committee. Mr. Portelli is the president and is on vacation this week.

The Chairman: He has chosen a good day. Please go ahead.

Mr. Colin Isaacs: Thank you, Mr. Chairman.

We are very pleased to have the opportunity to address the committee on the subject of Bill C-32. We see ourselves as the national voice of the environment industry in Canada. Along with our provincial affiliates, we represent the interests of 1,500 Canadian companies that develop and supply environmental products, technologies and services. We represent one of the fastest-growing sectors of the Canadian economy.

In 1995 annual sales in the environment industry sector exceeded $16 billion, representing 2.2% of Canada's GDP. Exports from the sector exceed $1 billion annually.

The sector employs over 123,000 people, more people than are employed in oil and gas, chemicals, logging and forestry, pulp and paper, or the textile sector.

Global market growth is projected by international studies to remain at about 7% per year through the year 2000, with double-digit growth rates in some key developing markets.

Our environment industry in Canada is a knowledge- and technology-based industry that already has significant international advantage. There are about 4,000 environment companies in total, located in every part of Canada.

In 1994, the Canadian Environment Industry Association participated in the five-year review process of the existing CEPA, and today we're going to comment on how the proposed bill compares with the issues we've raised previously. We're very pleased to note that many of the recommendations we made in 1994 appear to have been incorporated.

In 1994 we recommended that the principles of sustainable development be included in the declaration and that its principles be woven into the fabric of the act. We're pleased to see this has been done. However, we have some concerns that in part 5, Controlling Toxic Substances, there's still a tendency for a very prescriptive approach that does not balance the interests of industry and the economy with those of the environment.

We've heard numerous and serious concerns voiced on that subject by our constituents in the waste management community. In particular, we wish to comment on the lack of precise definitions for key concepts within the bill, such as the word “waste”, the word “measurable”, the words “virtual elimination”, and so on. We see this as potentially problematic as the words are interpreted subsequently in regulation and in enforcement.

In 1994 we recommended that the precautionary principle be incorporated into CEPA, and we're very pleased that this has been done. However, there is no explicit section on the precautionary principle as we've recommended. We'd like to see the precautionary principle incorporated wherever possible in the bill.

• 0915

On multi-stakeholder consultation, we believe that provisions for public participation adequately address our earlier recommendations for an open, transparent and multi-stakeholder approach.

On reporting and information sharing, we recommended in 1994 that CEPA provide for an integrated information sharing system that would provide regional access to all levels of government and all interested parties.

There are provisions in the bill for the creation of an environmental registry. However, there's no requirement for the minister to make full use of the registry or to provide full public access to information. We're therefore making our first recommendation that, except where the information is proprietary, relates to a single company, or where there's a request for confidentiality, all information gathered by the minister in relation to CEPA should be made fully available to the public via the environmental registry.

Similarly, we're recommending that the highest priority be given to the establishment and maintenance of a national pollution prevention information clearing house and that the information contained therein be made fully and freely available to the public.

In 1994, we recommended a geographically diverse and multimedia approach to environmental protection. This has been recognized in the preamble of the bill and we commend the government for incorporating the concept of biodiversity into the legislation.

We made recommendations with respect to coastal zone management and we see that those have been incorporated in the legislation.

On the topic of pollution prevention, this is addressed in part 4 of the bill and we see the wording there to be a reasonable compromise between the lack of pollution prevention provisions in the present CEPA and the wide-sweeping provisions that were proposed previously.

We believe the government should consider linking pollution prevention recognition with economic instruments designed to provide additional financial incentives to companies that are operating in an environmentally responsible manner. We therefore recommend that the government consider ways in which the adoption of voluntary measures can be encouraged within the private sector by linking the pollution prevention recognition program with carefully designed economic instruments to financially reward companies whose operations exceed environmental standards required by law.

In 1994, we recommended that the potential for environmental protection measures to contribute positively to the achievement of other priorities, such as economic prosperity and global competitiveness, be recognized in the act. The preamble to the bill acknowledges the need to do this. However, our recommendation does not appear to have been incorporated into the legislation itself.

The role of technology development and transfer in pollution prevention is vitally important to the environment and the economy. The environment industry is in the forefront of doing this in Canada. We believe the role of the environment industry as an enabling sector should be acknowledged in CEPA.

We also wish to recommend that the government renew and refocus its commitment to the infrastructure and programs that support the Canadian environment industry. For example, through the Canadian environment industry strategy, that has not been renewed.

We are supportive of the concept of economic instruments and recommend that the government consult with industry and, in particular, with the environment industry sector in the establishment of guidelines, programs and other measures for the development and use of economic instruments and market-based approaches.

We are concerned that in some aspects Bill C-32 maintains what I would describe as the old command and control approach, the prescriptive approach. We believe that the bill should be re-examined and revised to remove, as much as possible, prescriptions for methodology for achieving a desired result. CEPA and its regulations should focus on prescribing results, not methods.

• 0920

We have three remaining recommendations, Mr. Chairman.

First, we recommend that the government make use of advisory committees provided for in clause 7 of the bill to ensure adequate representation from industry, specifically from the environment industry. This is in the context of harmonization and coordination.

We believe that in the area of harmonization, when negotiating agreements respecting administration of equivalent provisions as described in proposed section 9, the government should insist that the most stringent of the existing guidelines and legislation should prevail.

In the area of equal opportunities for business, we recommend that clause 328 should be retitled to reflect its true nature, that of a provision for cost recovery, and that costs levied under its authority should be subject to the same cabinet oversight provided by the Federal Administration Act in regard to any other governmental cost recovery measure.

Our final two recommendations, Mr. Chairman: We see a need for an independent ombudsperson to ensure the necessity and effectiveness of all cost recovery programs. We believe that all cost recovery programs should be reviewed each year with the objective of eliminating governmental activity where possible and the related fee, of course, if some lower-cost alternative can be found.

Finally, it's strongly recommended that the government establish adequate resources for the effective enforcement of CEPA. I know this is in line with your committee's recommendations of a couple of weeks ago.

Thank you very much indeed, Mr. Chairman. I would be delighted to answer questions from you and from your members.

The Chairman: Thank you, Mr. Isaacs.

Mr. Pullen, would you like to take over? You have ten minutes.

Mr. Michael Pullen (President, Canadian Waste Alliance): Good morning.

The Chairman: Good morning.

Mr. Michael Pullen: Mr. Chairman, members of the committee, my name is Michael Pullen. My companion is Wally Wells, also with the alliance. We represent the Canadian Waste Alliance, which is composed of a group of national companies that practise in various provinces across this country. Many of them are international and have international waste movements.

Also included in the Canadian Waste Alliance is a growing number of consulting companies who are national and international in scope and also are interested in waste management. The group was formed to comment on federal issues and initiatives in Canada specifically. All comments put before you today by the alliance are in the context of those parts of this legislation, Bill C-32, that will affect waste management only.

Over the past year, members of the Canadian Waste Alliance have provided comments to the government on the new CEPA. The alliance undertook this work in order to ensure that the government had as much information as possible from our industry when creating this bill.

Our goal, like the government's, is to contribute to legislation that improves the existing legislation, to truly protect the environment while recognizing the diverse needs of the various communities within Canada.

The latest version of the proposed legislation, Bill C-32, has been sent to us for review, and it is disappointing to see that the comments and concerns related to waste management expressed earlier by the alliance members have been completely ignored. We cannot help but feel that something of what we said had merit and, at the very least, a statement from someone as to the reasons for an absolute rejection of our ideas and concerns is warranted.

We believe the government has a duty to view all of its proposed and existing legislation from within, other than governmental paradigms. Simply put, Canada is focused on satisfying the terms of Basel and the Canada U.S. agreements, rather than protecting the environment. For this reason we must again attempt to explain to the government, through this committee, why there are some sections of this new bill that simply don't work in the waste recycling management of manufacturing industries in Canada.

• 0925

The preamble to this bill states that it is being created to ensure that the environment is protected and sustainable. Using this measure, I think it is reasonable to examine each section, division and clause and assign each a value in meeting the goals as stated in the preamble. Frankly, we find that many parts do nothing to enhance the present or sustain the future environment.

Secondly, there seem to be sections that encroach on already effective legislation, like the TDG Act, that industry and government both know works. The extractions of fees for the wrong reasons from any municipality or industry is unconscionable. We are concerned that implementing the proposals and the intent of Bill C-32 will not improve the environment to the extent needed, and we think it will merely maintain the status quo, with added unnecessary administrative, bureaucratic and financial burdens placed upon the people of Canada.

We respectfully request that this committee re-examine the goals and objectives of the bill and ensure that the content meet these goals and objectives, not only from the government's viewpoint but from other different viewpoints as well.

Here are some examples of areas where we feel this bill can be improved.

First of all, definitions of some of the activities are all-encompassing and, because of that, somewhat vague. As an example, biotechnology seems broadly defined to include landfills, composters, soil manufacturing, and may be all too encompassing.

Secondly, the definition of fuel can be improved if a thermal threshold is used in order to define it, and some mention is made of the inclusion or exclusion of waste-derived fuel.

The definitions as they exist can be taken advantage of by the public or government employees in the matter of interpretation. Frankly, we as industry members sometimes have trouble guessing what is acceptable and what is not. Ironically, fuzzy definitions like these examples tend to tilt a level playing field in favour of those less concerned about diligent environmental management.

Under present legislation, it is very difficult to determine what is and what is not waste. Each province is different, each problematic. Adding one more definition, particularly at the federal level, makes it even worse. Needless to say, an error in interpretation of this definition by industry can result in severe consequences. We require a clear definition of waste that is harmonized with provincial definitions.

From the definition of waste will spring proper definitions for things like recyclables and waste-derived fuels. Clearly, if the objective of the bill is to reduce the production and disposal of waste of all types, it behoves you to insist on definitions within the bill that enhances everyone's ability to carry out the actions that will lead to the achievement of the goals. It is hard to describe the problems associated with not clearly knowing whether we should be driving on the left-hand or the right-hand side of the road on some mornings.

We also have difficulty with terms like “virtual elimination” contained in clause 64. It was commented this morning over breakfast that “virtual reality” is a sensible oxymoron and that the inclusion of the word “virtual” in legislation doesn't make a lot of sense. It's virtual.

While we understand the reluctance of government to be seen setting an acceptable standard greater than zero, care must be exercised when virtual elimination is based on only the scientific ability to detect a molecule rather than to quantify its effect. One can only speculate how the courts are to react to this approach with the definition of virtual.

Many of the foods ingested by us today are toxic when consumed in excessive quantities. Drugs that have such a positive effect on us in restoring and maintaining our health also can be similarly deadly if abused. In our opinion, virtual elimination should be related to only an assessment of the environmental and health risks associated with given concentrations and exposures. There are valid arguments that we sometimes don't know enough about certain substances to allow us to determine risk. Nevertheless that doesn't mean the ability to detect a substance in minute quantities is the only acceptable method of determining health and environmental impact.

• 0930

Significant concerns of the industry we represent and of those whose waste and recyclables we manage centre on the fact that we believe this new act can be used to impose flow control and the imposition of fees for the movement of all types of waste and recyclable materials. The service being provided by Environment Canada gives nothing to environmental protection and sustainability. Frankly, even with the assurance that costs recovered will be only matched by the costs of administering service, we feel the fees will be, by necessity, higher than needed.

In fact no fees should be collected at all, since this would be one more disincentive to the cost of material diverted from waste. The administration of this and any other program must be funded out of general revenue, not a selective fee-for-service tax, unless the industry being selectively taxed can control the fee administration costs and, if needed, open the process to public tender.

In the time remaining, I'd like to specifically mention some clauses of the bill that we would like to assist in modifying.

Administrative duties, which are in clause 2, should become principles reflected in the wording of the rest of the bill.

The advisory committee in clause 6 would presumably replace the effective CCME. We see no reason for this.

In clause 11, the bill should provide a clear definition of “environmental protection action”, and some form of accountability must be assumed by the individuals bringing the action forward.

The approval of a court of a settlement or discontinuation of an action is not required. The affected parties should be able to agree and assume any responsibility for their decisions without costs to courts.

Clause 46 should be amended to place the onus on government for demonstrating reasons for not keeping information confidential. These must be based on reasons that reflect the public good, including the protection of industry.

In part 4, any pollution prevention standards should be based on risk analysis and as a result allow industry to be innovative and creative in finding solutions to waste and recycling problems.

There are others on the sheets, which I will not mention, but in summary, the position of the alliance is simply this. We recognize the need for an updated and improved act, and this goes a long way to doing that. We agree that Canada must primarily protect and enhance the environment and secondarily meet the international obligations it has chosen to accept, because if you achieve the first, you will certainly achieve the second.

We think the government, from its point of view, believes it has achieved this goal. We see problems with the interpretation; the imposition of fees; the duplication of provincial mandates; the need for such broadly based, all-encompassing language in many cases; and the departure from accepted health and environmental risk assessment as a basis for environmental management.

Thank you, Mr. Chairman.

The Chairman: Thank you very much, Mr. Pullen.

Who would like to be next? Mr. Gibb, please. You have 10 minutes.

[Translation]

Mr. Roger S. Gibb (Vice-President and General Manager, Stablex Canada Inc.): Mr. Chairman and committee members, thank you for giving me an opportunity to appear today to express my point of view on the Canadian Environmental Protection Act.

My name is Roger Gibb and I am Vice-President and General Manager of Stablex Canada. Stablex, a business located in Blainville, Quebec, is world leader in the treatment and stabilization of inorganic residues. Approximately 90 per cent of our customer base is located within 400 kilometres of our plant.

Because of our location, the United States market is an important part of our customer base. Stablex employs a 125 employees, the majority of whom have college or university level education. Stablex is the first, and perhaps the only, environmental services company in the world to obtain both ISO 9001 and ISO 1401 certification. This is a matter of pride for our employees, those living in Quebec and in the rest of Canada.

The ISO certifications and exclusive high technology have given us an international profile and we have entered into numerous discussions with various parties about opportunities to export this environmental technology throughout the world, in keeping with Environment Canada and Industry Canada's policy to market and export environmental technology.

• 0935

I came here today to focus on a very specific section of Bill C-32, CEPA, which deals with the movement of hazardous waste, and more specifically, the import and export of such waste.

Section 185 of Bill C-32 would provide Environment Canada with the authority to charge fees for services related to the processing of notifications and manifests required for transboundary movements. At first glance, these fees appear to be quite justified and do not appear to be controversial. However, a closer analysis of the relationship between these fees and the current free-trade agreements and other policies, such as the policy on the export of environmental technology, reveals that this question is not all that simple and that these fees are inappropriate.

Costs recovery under CEPA will be for the processing of notifications and manifests for the trans-boundary movements of hazardous waste and recyclable material. Notification, consent ant the manifest are requirements provided for under the Canada-US bilateral agreement and the United Nations Basle Convention. The bilateral agreement came into effect in November 1986 and the Basel Convention came into effect in May 1992.

It is interesting to note that this requirement already existed before these two agreements were struck. In other words, the agreements did not give rise to these exchanges and they did not ratify them. They simply define the conditions to ensure the highest degree of public awareness and safety. In addition, such fees have never been associated with either one of these agreements.

[English]

It is worth discussing the background of the movement of hazardous waste across the border. Some may have a negative view of this rather important trade—important both in an economic sense as well as for the environment.

As we all know, each year industry generates millions of tonnes of a by-product or a waste that is deemed hazardous. The manufacture of products from cars to tennis balls and even pizza boxes generates one form or another of hazardous waste. This waste must be properly managed in order to protect the public and the environment. Much of this material is taken off site to specialized treatment and/or disposal facilities that are designed specifically to safely manage this material. Our facilities are in essence the final step in the manufacturing process, no less important than any other.

Some facilities, such as Stablex, specialize in the treatment of inorganic material, while others manage organic material. There are both environmental and economic advantages to minimizing the distance this material must travel in order to receive proper management. Quite often the closest appropriate facility is located on the other side of a political border.

As such, a balanced and regional trade has been in existence between the United States and Canada for some time. The trade of hazardous materials and wastes between Canada and the United States has been recognized by both governments as often the safest and most efficient means of managing this material, as the distance is minimized.

The benefit of minimizing the distance a material must travel is recognized in clause 191 of Bill C-32, as well as in both the bilateral and the Basel agreements. In a communiqué from then Ambassador D.H. Burney to a U.S. congressional subcommittee, Ambassador Burney reiterated the position of the Government of Canada on this issue in regard to the bilateral agreement:

The Agreement is based on the principle that hazardous wastes should be treated at the nearest licensed facility, in order to minimize the distance they must be transported and to ensure safe disposal.

Furthermore, an Environment Canada document explains:

Canada and the United States both realize the environmental and economic advantages of minimizing the distances that hazardous waste must travel. As a result, approximately 100,000 tonnes of hazardous waste cross the Canada-U.S.A. border annually, on their way to the nearest safe disposal or treatment site.

[Translation]

Whereas the bilateral agreement creates a protocol regarding the movement of hazardous goods and waste between Canada and the United States, the Canada-US Free Trade Agreement and the North America Free Trade Agreement, NAFTA, prohibit the levying of fines and discriminatory taxes on the transboundary trade of goods such as hazardous waste.

After consulting trade lawyers in both countries, we feel that charging fees for trade would be in violation of the two free trade agreements. Sections 408, 409(b) and 1402 of the Canada-US Agreement and section 315, 316 and 1202 of NAFTA would all apply to this situation. Basically, the two agreements prohibit the charging of fees and various taxes for goods traded between the two nations, fees and taxes for goods consumed within either one of these two countries.

• 0940

[English]

We find it quite ironic that Environment Canada would even consider such a fee, given the position of the Government of Canada on this very issue throughout the decade. As recently as September 1997, officials of the Embassy of Canada in Washington reiterated the government's objection to the use of fees to pay for border services. The minister and deputy head of mission at the embassy stated the following rhetorical challenge in a speech on obstacles to border trade and commerce:

If you believe that governments have a responsibility to provide adequate funding out of general revenues to meet current or future border-crossing needs, deliver that message.

Needless to say, we do believe so, and we're hopeful the committee will sustain the long-held position of the government and remove the fee authority from the bill.

[Translation]

However, if such fees were charged, similar fees should then be charged for the domestic movement of waste and recyclable materials. It would appear that Environment Canada has requested the authority to do this under section 189 of Bill C-32. This section would authorize the charging of fees on the domestic movement of materials. Section 189 is somewhat problematic because it appears to be in violation with the federal-provincial-territorial harmonization accord.

Currently, inter-provincial movement is governed by provincial regulation. Any duplication of existing controlling mechanisms is absolutely unnecessary and there's certainly no justification to impose a fee for this duplication. At a time when Environment Canada is concerned with current costs of administering controls, the expansion of unnecessary authority is unwarranted. It appears that the fee authority in Section 189 of C-32 exists only as a means of trying to avert conflicts with international trade agreements which arise in Section 185. It is certainly bad policy to implement one tax simply to justify the implementation of another.

If I may, I would like to discuss other aspects of my written submission. Environment Canada's plans to charge fees under a cost-recovery mechanism under the Financial Administration Act would not only reduce our long-term ability to remain competitive but would also deprive us of important resources we need to export our technology throughout the world. I repeat: these fees will have a negative impact on government policy pertaining to the export of Canadian environmental technology.

In conclusion, we are asking that the authorization to charge fees under sections 185 and 189 be removed from the bill.

Mr. Chairman, thank you once again for giving me an opportunity to speak to the committee.

The Chairman: Thank you, Mr. Gibb. I was happy to hear from you.

The representatives from the Grappe de développement des industries de l'environnement have not yet arrived. We will begin without them. We will give them ten minutes when they arrive.

[English]

Mr. Gilmour, would you like to go first?

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Thank you for coming here before us.

It was a fairly hard-hitting presentation. Just off the top, do you consider this new bill a step in the right direction, an improvement on the old bill, or have we taken a step backward? Just in a few words, what are your impressions, all of you, with the new bill? Is it moving forward? You've hit a number of criticisms, but overall—

Mr. Michael Pullen: Overall, the bill represents a clear move forward with respect to waste management, but we're reviewing and presenting that it's virtually the same as a year ago. It's very restrictive in terms of fees. It's added costs to our services. And it provides us with some concerns about flow control that the government now has on the movement of waste across boundaries within Canada and international boundaries, which I don't believe were ever intended by Basel.

Mr. Bill Gilmour: Okay.

Mr. Colin Isaacs: We would agree that the bill is a step forward. I think it's difficult to analyse how significant a step. If the bill is provided with sufficient resources, both for implementation and for enforcement, then we will be making good progress, but those two aspects may be even more important than the revisions to the bill itself.

As the committee has identified in its own previous reports, environment is not as high a priority for the Canadian government at the moment as we would like to see. I think we would be in agreement that raising the priority accorded to environmental matters within government as a whole is by far the most important priority at the present time.

• 0945

Mr. Roger Gibb: I think it's important to be underlining the importance of this law being reviewed in a fairly expeditious fashion, which is always desirable. I think it's important too in terms of the classic federal responsibilities—in terms of the international responsibilities, in terms of atmospheric Kyoto-type issues, in terms of waterways, wildlife, and so forth—that those roles must be maintained.

What I sense in this bill is perhaps more of an intervention in what I would consider classically provincial responsibilities. The notion of pollution prevention plans, for instance, is a case where it would suggest that the federal government will be really on the ground, really involved with industry in terms of introducing toxic substances. There's a strong focus on intergovernmental collaboration, which I think has to be emphasized. But there seems to be a dichotomy between on the one hand a leadership role, an animator role, and a more direct intervention.

In summary, I think it's a positive sense. It's moving in the right direction. The aspect of information of a register and so forth, the whistle-blower provision and so forth I think are all desirable and certainly are similar to legislation elsewhere in the world. But there's a bent toward an interventionist sort of role, which perhaps could be difficult to manage sometime down the road.

Mr. Bill Gilmour: In terms of the voluntary—and I think we all hate that word “voluntary”, and if we could find another word it would be preferable—over command and control, the dilemma is you have probably 80% of businesses on the good side. I like your presentation, that there should be incentives. I think that has merit. But what about the 20%, the ones that don't do it, that need to have, for want of another word, a nudge in that direction? Where do we find the balance between voluntary versus command and control, when you do have these players who refuse to be part of the game?

Mr. Colin Isaacs: I think by indicating the dislike that we share for use of the word “voluntary”, you have in many ways highlighted the problem. You are undoubtedly aware that in other jurisdictions, voluntary, to use the word again, is often backed up with some kind of penalty for not participating in the voluntary program. I think it's that part that has sometimes been missing from the Canadian approach. And of course enforcement has not been as tough as we would like to see, even with the laws and regulations currently in place.

In addition, I think there's a real need to do more than rely entirely on the goodwill of the 80%, but to establish some performance-based standards that are mandatory for everybody and ensure that the basic needs of the environment as well as the economy are met.

Mr. Michael Pullen: In all jurisdictions across Canada, including the federal law, the aim is not to promote the people and the companies that make an effort to be diligent. The laws are written to catch that small percentage—20%, 10%, whatever it is—of bad actors. By doing so, those laws inevitably impinge upon the people who are trying to do it right. It boxes those groups in. And I suppose that goes for municipalities as well as industry.

We've been trying to discuss this problem—and it's a universal problem with legislation and regulation—that somehow you've got to separate that control over those groups who are not being diligent and violating the law, if you want, from those who are making a sincere effort and doing it voluntarily within their own environmental management systems. You promote that and give them bonuses or incentives to do that.

• 0950

But I don't believe you can do it with one piece of legislation. If you have to, then there's an effect that comes down onto the people who are trying to do it right, and it's very restrictive. That's the safeguard you've got to look at.

The Chairman: Thank you, Mr. Gilmour.

[Translation]

The representatives from the Grappe de développement des industries de l'environnement are here. Mr. Cabana and Mr. Dubé, welcome to the committee. We will give you ten minutes to express your point of view. If you have prepared a text, I would invite you to distribute it.

Mr. Serge Cabana (Chief Executive Officer, Grappe de développement des industries de l'environnement): Thank you very much and I apologize for being late. We have not prepared a text to hand out to you this morning, but if you would like, we could do so. We will be giving a preliminary statement this morning.

The Grappe de développement des industries de l'environnement is comprised of five committees from the water, air, soil, waste and environmental management sectors. Given the time constraints that we are experiencing at this time of the year, we prepared Grappe's opinion with our executive. This morning, we will therefore be presenting you with a brief preliminary opinion that we could expand at your request.

We are here this morning on behalf of Quebec's environmental industry. I will talk briefly about Quebec's environmental industry and the Grappe. My colleague, Mr. Robert Dubé, will then talk about our analysis of the bill under review. I will then provide a few recommendations.

It is important to point out that the Quebec environmental industry, like its Canadian counterpart, is not as healthy as it was a few years ago. For the past two to three years, Quebec has been dealing with a shrinking, stagnating national market. The number of environmental businesses has dropped from 850 to 750, and the number of jobs has decreased from 15,000 to 12,000. Our local market has shrunk, prompting us to look increasingly to the export markets that depend on our technological development, and which depend to a large extent on regulation.

I would also like to remind you that Quebec's environmental industry is to a large extent composed of small and medium-sized businesses, resulting in a lot of limitations. As an example, many of them don't have a lawyer to assist them in interpreting legislation and regulations.

The Grappe has been in existence for three years. We are a network of decision makers and environmental entrepreneurs and our membership is comprised primarily of businesses involved in the environmental service and technology industry, but also includes researchers and government representatives, both from Quebec City and Ottawa, as well as university and union representatives. The Grappe is first and foremost a network that includes most of the stakeholders in the environmental industry.

I will give a brief description of what the Grappe is doing to turn the situation around, the situation being, and I will humbly admit this, not very good.

We are striving to develop this industry and for the past two years we have been working very hard to carry out five projects. We have set an intelligence network, which we call ÉCO-RADAR, and the purpose of this network is to provide our businesses with privileged information. We have helped set up a sectoral environmental manpower committee, environmental manpower being a serious problem for us. This committee now includes all stakeholders. We got ten or so investment companies together and launched a competition to fund demonstration projects. A few weeks ago, we set up an environment exporting club to help small and medium-sized businesses go after big contracts through this partnership.

• 0955

We are here this morning because we created a policy and regulation committee that over the past year has been setting up a joint committee to liaise with the Quebec ministère de l'Environnement de la faune and Environment Canada.

I'd like to introduce you to Mr. Robert Dubé, who sits on our policy and regulation committee and who will be presenting our analysis or critique of the bill.

Mr. Robert Dubé (Policy and Regulation Committee, Grappe de développement des industries de l'environnement): Thank you very much, Mr. Cabana.

As Mr. Cabana mentioned in his introduction, we are presenting you with a preliminary statement. Because of the short amount of time we had, our policy and regulation committee was not able to get all of its members together and to consult all the presidents from the various sectors.

The critique which we will be presenting today will focus on four positive points and four negative points of the bill. As you can see, our comments are balanced.

One of the positive points to emerge from our discussions concern the provisions or incentives to implement pollution prevention plans and environmental management systems. According to the bill, the environmental management systems will be ordered by the courts. We see this as a good opportunity for fostering growth in our industry provided that these environmental management systems are found at the upstream end of the businesses, where we will then be able to establish objectives, targets and corrective plans in keeping with the environmental policy pertaining to the environmental management system.

Obviously, when you talk about corrective systems, this represents, for us, technologies or development for our industry because the policy makers will be looking to our members to set up these environmental management systems, whether this be in the form of equipment or professional services. We, of course, see this as a measure provided for in the legislation and which will be ordered by a court. We are hoping that this measure will be adopted by other businesses on a voluntary basis, as some have already begun to do. Perhaps with leadership, we will encourage businesses to implement these environmental management systems.

The second positive point pertains to the principle of virtual elimination. We feel that this is a very good measure in itself and that it will probably enable us to become more competitive with other countries who are adopting a similar approach. For us, virtual elimination means detection technologies or a detectable threshold, which one again, is something that will spur growth in our industry.

As for the third positive point, although it may appear to be paradoxical given the positions currently being discussed at the Quebec ministère de l'Environnement et de la faune, we feel that this bill demonstrates a desire to regulate. In our industry, regulations is the spearhead or the incentive which will help us develop. Accordingly, the committee feels that the regulatory arsenal which will be established will be empowering.

And now for the fourth positive point. Generally speaking, we get the clear impression that the overall bill pursues the objective of sustainable development.

I will now turn to the four negative points. We feel that it is, generally speaking, cumbersome. Indeed, the bill contains 366 sections. Getting a handle on all of this documentation, or grasping the ins and outs of the issues, is not necessarily a given for our small- and medium-sized businesses. You must understand that not all of our members have an in-house lawyer who can guide them in enforcing the legislation and who can read behind the lines of the bill. Our committee, which is composed primarily of volunteer members, is addressing this issue.

The second negative point pertains to the fact that we are not lessening the bureaucracy. There are several reporting requirements and we also suspect that there will be greater delays and more paperwork.

The third negative point concerns the regulatory fees, which are new and risky. Let's take the case of living organisms in particular. Several businesses in our sector are developing soil decontamination technologies that use living organisms. The applicable fees or the regulatory fees may hurt these businesses. In this case, we are no longer talking about the polluter-pay principle, but instead of the solver-pay principle.

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Fourthly, there is of course some overlap and duplication with certain pieces of legislation, particularly Quebec's Legislation on Environmental Quality and its regulations on air emissions. There is an obligation to report on almost every type of substance. We will go back to this issue when Mr. Cabana presents the recommendations.

Thank you.

Mr. Serge Cabana: I would like to present you with some principles regarding the recommendations. There is the pursuit of sustainable development, the philosophy of 3RVE management and the principle of polluter-pay. We must continue to forge ahead.

We are also in favour of the principle whereby the government will be monitoring results, namely, the standard will pertain to what is coming out at the end of the pipe rather than to the means used for achieving the objective. We feel that this is extremely important. We feel that this is the approach sought, but it is not always obvious in the text of the bill. Finally, with respect to principles, there is an attempt to balance the implementation of rigorous, realistic and effective regulations and the reduction of paperwork required for investors and promoters.

We would like to make two general recommendations and two specific recommendations.

First of all, we would recommend that the provincial and federal governments harmonize legislation and regulations. This concerns us.

Secondly, we must lighten up the bureaucracy. It is very cumbersome according to this bill. There is more paperwork and additional delays. Whenever there is a delay, there is a delay in investments.

Our two specific recommendations are as follows. If we are to keep the much discussed regulatory fees that are of concern to us, perhaps we should establish an agency involving the industrial associations that could look after the redistribution of this money so that it could be used to protect the environment and develop the environmental industry.

Our second and final recommendation is that we should perhaps give some thought to adopting a single window approach, in certain specific cases, as a solution to duplication and overlap between the provincial and federal governments.

Thank you very much.

The Chairman: Thank you, Mr. Cabana. Thank you, Mr. Dubé.

Mr. Bigras, please.

Mr. Bernard Bigras (Rosemont, BQ): I would like to begin by asking the Canadian Waste Alliance a question.

You are afraid that section 185 of the bill will discourage recycling and that one group will unfairly be charged fees. Mr. Gibb of Stablex indicated that he shared the same concerns, except he went farther than you did.

Do you feel, as he does, that the charging of fees on this trade would violate the free trade agreements with the United States. Have you thought about this issue?

[English]

Mr. Michael Pullen: Mr. Bigras, the recycling industry—the waste diversion industry, if you want—suffers from taxation that the virgin materials industry does not. It has extra costs to do with cleaning, sorting, quality control, and a whole host of manufacturing processing costs. Adding any cost to their process puts them at a disadvantage for competing against virgin materials.

CEIA—all the waste alliance companies—are trying desperately to reduce on all fronts the costs associated with recycling, because recycling is and will remain successful only if there are markets. If they can't compete in a market, then recycling does not happen.

In terms of Mr. Cabana's comments, I don't know that I can agree with him on that. We're trying to reduce costs to make things happen, and this we see as an increased cost. It's one of the reasons everybody around the table is trying to get recyclable materials out of the definition of “waste”, because the two are managed differently with respect to legislation and regulations. We see no reason why a used battery requires a regulation and a clean, non-used battery doesn't. They have the same environmental impact.

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[Translation]

Mr. Bernard Bigras: I also have a question for Mr. Cabana. Mr. Cabana indicated quite eloquently the importance of the environmental protection industry in Quebec, known as the IPE. This sector represents tens of thousands of jobs, and I think that we have to do everything we can to develop this industry. He focused on four positive and four negative points pertaining to the bill.

My question is as follows: As far as promoting sustainable development is concerned does he not feel that these four negative points have just reduced if not annihilated the impact of what we are doing to promote sustainable development?

We have been told that the bill is cumbersome, that the bureaucracy has not been lessened and that there is overlap. Isn't that a constraint on sustainable development?

Mr. Serge Cabana: Mr. Bigras, I completely agree with your interpretation. The problem we have is that this bill has to try to grapple with interests that are varied, divergent and at times contradictory. On the one hand, we must protect the environment and, on the other hand, the interests of the major users of our services and of our industry are not necessarily always the same. Everyone has his own development interests.

We feel that this bill is cumbersome and difficult to interpret and that it may lead to some confusion and overlap. We have not had time to do an in-depth analysis of this overlap, but we were able to note certain areas of overlap and duplication. This is going to put an additional bureaucratic burden on our businesses and there may be some confusion about the interpretation.

In our business, nothing stops a promoter better than not knowing and being confused. An entrepreneur needs to know the rules of the game, he needs to know to what he will be subject and to whom he will have to report.

Right now, this bill is not clear enough. For Quebec entrepreneurs, who are already subject to Quebec regulations and legislation, the bill is adding to their burden, at a time where we want to stimulate investment and projects, not stifle them.

The Chairman: Thank you, Mr. Bigras.

[English]

We have now Mr. Jordan, followed by Mr. Knutson, Madam Kraft Sloan, Mr. Gallaway and Mr. Charbonneau.

Mr. Joe Jordan (Leeds—Grenville, Lib.): Just a couple of quick questions. To the Canadian Waste Alliance, do you have any indication, in terms of your membership, of how many of them have or are trying to obtain ISO standards?

Mr. Michael Pullen: Mr. Jordan, no, I can't give you a clear, straight answer to that. However, I can tell you that two of our members are looking at putting an ISO 9000 series in place on some materials recovery facilities, and one of our members is trying to deal with ISO 14000 on a landfill, which is a rather difficult thing to do.

Mr. Joe Jordan: Okay.

Mr. Gibb, were you involved in the certification of your company?

Mr. Roger Gibb: Very much so.

Mr. Joe Jordan: If I understand correctly, then, you establish standards, you develop procedures, you implement objectively verifiable measurements, and you're subject to third-party audits. Is that pretty much how it works?

Mr. Roger Gibb: Yes. ISO 9001 covers quality assurance systems, and ISO 14001 environmental management systems.

Mr. Joe Jordan: So you'd say, in terms of competitive implications to your company, you're in a better position having done that?

Mr. Roger Gibb: Absolutely.

Mr. Joe Jordan: On the spectrum, then, if we put command and control at one end and absolute voluntary compliance on the other, ISO 9000 would fit where, in terms of internally in your company? If you said to people, “Here's what we want to do. Do it the way you want”, or “Here's what we want to do, and here's how it's to be done, and here's how it's to be measured, and here's how we're going to make sure we do it”, where in that spectrum would ISO go?

Mr. Roger Gibb: It would clearly be at the voluntary end of the spectrum. A company with an ISO 14001 certification in place, where clearly they will meet or exceed provincial or federal or municipal regulations—

Mr. Joe Jordan: I'm talking about internally in your company, though. You don't say to somebody in your company, “Here's the goal. Do it the way you want”. You have standards and procedures they have to follow.

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Mr. Roger Gibb: Absolutely. And ISO 14001 requires standard operating procedures. It requires targets, objectives, and so forth, and an internal audit system as well as an external audit system, to ensure that those methods and practices are effective.

Mr. Joe Jordan: Yes. I guess what my question is getting at is that the introduction of what could be viewed as sort of intrusive, bureaucratic steps has actually led your company to be more competitive and more effective.

Mr. Roger Gibb: Well, the government certainly didn't encourage us to join ISO 14000. In fact no Canadian government has endorsed ISO 14000, to my knowledge.

Mr. Joe Jordan: No, I'm not holding the government out as a standard; I'm saying there is benefit to rules and procedures and steps.

Mr. Roger Gibb: On a voluntary basis. They tend to be market-driven initiatives.

We see a competitive advantage in being ISO 14000 certified. Certainly I could demonstrate that to be the case with our company and many other companies. But it didn't take government to impose it—I guess that's my point.

Mr. Joe Jordan: Yes, and one of the problems, as Mr. Gilmour pointed out correctly, is that the term “voluntary compliance” means many things to many different people. When you talk about a voluntary basis, you're talking about how you decided to pursue that on a voluntary basis.

Mr. Roger Gibb: Exactly.

Mr. Joe Jordan: The steps inherent in doing it aren't voluntary or discretionary. They're laid out and spelled out.

Mr. Roger Gibb: Absolutely.

Mr. Joe Jordan: Okay.

You point out 100,000 tonnes of cross-border waste. Can you break that down in terms of Canada to U.S., and U.S. to Canada?

Mr. Roger Gibb: It's roughly equal. It's a bilateral trade—100,000 tonnes north, and 100,000 tonnes south.

It's not necessarily the same material, obviously, and that's the point we want to make—that in terms of some facilities, they are better equipped to handle, say, an organic material versus another. Geographically, for instance, we're close to New England, so the logical locus for our customers is in the Quebec and New England area. Our position, which has been supported by the Quebec government since our creation in 1983, has been to serve a geographical area, regardless of political borders.

Mr. Joe Jordan: Okay. In terms of the purchase decision, then, of a company that has waste, factoring into that would be that it has to be a treatment facility that can handle it.

Mr. Roger Gibb: Yes.

Mr. Joe Jordan: What I'm wondering is, how far down the line is price?

Mr. Roger Gibb: Price is number one.

Mr. Joe Jordan: There are that many options for them?

Mr. Roger Gibb: Based on the surveys we've done with our customers, number one actually is what we call peace of mind. It's dealing with a company that's professionally run, that has an excellent environmental record, and so forth.

Number two is price. Our position in terms of the American market is that the notification procedure that is in place because of the bilateral agreement—Canada and U.S., as well as the Basel agreement—is already a handicap for us. What we're talking about would be a $300,000 annual charge, so it's a supplementary cost that we could not pass along to our U.S. customers.

Mr. Joe Jordan: Right. Have you noticed an increase in business, given the state of the Canadian dollar versus the U.S. dollar?

Mr. Roger Gibb: No. The Canada and U.S. prices, on an equal basis, are very similar. It's very much an open market.

Mr. Joe Jordan: So even with that factored in— Okay, thanks.

The Chairman: Thank you, Mr. Jordan.

Madam Kraft Sloan, please.

Mrs. Karen Kraft Sloan (York North, Lib.): Thank you very much. I'm just wondering where the figures are coming from in terms of the earlier discussion around voluntary compliance, when it was stated that only 20% to 10% of companies fail to comply.

Mr. Michael Pullen: If I may, that number came from Bill Gilmour, and I think it was a hypothetical number.

Mr. Bill Gilmour: It was just a—

Mrs. Karen Kraft Sloan: Okay. I heard witnesses talk about 20% and 10%, and I was just wondering if you had statistics that I didn't have access to.

Mr. Michael Pullen: No. I was referring to the same numbers that Mr. Gilmour was using.

Mr. Bill Gilmour: Peter—

[Editor's Note: Inaudible]— kind of used those, roughly.

Mrs. Karen Kraft Sloan: I thought his numbers were 60% in voluntary compliance, on industry average, and 94% where there's actually regulation requiring industries to act in certain ways.

Mr. Bill Gilmour: At one point he used the 80%-20%, just in a rough analogy.

Mrs. Karen Kraft Sloan: Okay. I guess I have different numbers than you do, Mr. Gilmour.

If I could ask the question of the Canadian Environment Industry Association, on the precautionary principle, where you had suggested explicit wording of the precautionary principle in a particular section, I'm wondering if you have an example of that wording.

Ms. Rebecca Last (Director of Programs and Policy, Canadian Environment Industry Association): I'm sorry, you're asking if we had suggested explicit wording?

Mrs. Karen Kraft Sloan: Yes.

Ms. Rebecca Last: No. I believe what we were recommending in our brief was that there be an explicit section of the act devoted to the precautionary principle, in the same way as there is an explicit section devoted to pollution prevention.

Mrs. Karen Kraft Sloan: Do you have any wording?

Ms. Rebecca Last: For what that section would say?

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Mrs. Karen Kraft Sloan: Yes.

Ms. Rebecca Last: At this point, no, but we would certainly be delighted to work with you to develop that wording.

Mrs. Karen Kraft Sloan: Okay. That would be great. Thank you.

The Chairman: Thank you, Mrs. Kraft Sloan. Mr. Gallaway has evaporated, so I will call on

[Translation]

Mr. Charbonneau.

Mr. Yvon Charbonneau (Anjou—Rivière-des-Prairies, Lib.): I think that we need to take some time to underscore the importance of a testimony given by the environmental industries, which is quite different from what we have heard up until now, namely, the testimony given by major industries and the ecologists. To some extent, these are the people who work in the field of environmental management on a daily basis. They're in charge of the clean ups, of planning and prevention in many businesses or they work alongside many businesses. It is in our interest to give some thought to the balanced point of view that they have brought to the table. Perhaps we should even find an opportunity to hear more about the message they are conveying to us today, a message that they had to prepare quite quickly.

In particular, I would like an opportunity to better understand the positions that have been presented to us today. For example, Canadian industry we are told represents one of the fastest growing sectors of the Canadian economy, whereas we have been told that the Quebec industry is in a rather sorry state. You have come up with two diagnosis, one that says that the industry is growing and the other that says it is in a decline. Does this have to do with the type of industry you represent, with a different number of sectors you cover? Could you explain that?

Secondly, unless I misunderstood you have different opinions about the issue of virtual elimination. The people representing the Canadian industry have cautioned us about this concept, and you appear to include it amongst the positive points. I would like to hear each of your opinions on the matter.

Thirdly, the representatives from the Grappe québécoise say that they agree with the trend to regulate, but criticize the heavier bureaucracy. We will have to look into this. You do, however, agree with the issue of fees. You appear to think that this would be a significant handicap. We will have to go back to this issue in order to understand the various opinions, once we have a good overview.

To the gentlemen from Quebec, you said that you are worried about the issue of federal-provincial harmonization. I would like to hear what you have to say. At the end of your presentation, you touched on this issue but you didn't have enough time to offer much explanation. How are you concerned about this?

These are my questions for the witnesses.

[English]

The Chairman: That will take a good couple of hours. I would appreciate it if you would compress your answers, please.

Mr. Serge Cabana: I'm going to try to answer two of the questions, and then Robert will continue.

[Translation]

I would like to answer the first question and I would be curious to hear what the Canadian Environment Industry Association has to say about the industry figures.

[English]

The Chairman: We don't want a debate between you people, we want you to comment on the bill.

[Translation]

Mr. Serge Cabana: Mr. Charbonneau has asked us for some industry figures. It is very difficult for us to obtain real figures for the industry. Recently, we were told that several attempts had been made to get figures for the United States and the international market. First of all it depends on the definition of environmental industry. These definitions vary. Depending on whether or not you go with one definition or another, in Quebec, this would involve 750 or 1,500 businesses.

We have a very strict definition: these are strictly businesses that provide external services in the environment sector, including services, products or technologies. Accordingly, any business that has its own in-house service to look after its own needs is not considered to be part of the environment industry, because these business do not provide external services.

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From our point of view, we have the impression that we are experiencing a decline in the industry according to the strict definition. I looked at some reports recently. And survey was conducted in 17 American States and it was noted that 25% of the environmental services businesses in these 17 States had closed down over the past two years. This trend is partly owing to the winds of deregulation that have blown and are continuing to blow over the United States.

Three years ago, we were talking about a 10% growth rate for our industry in Quebec. Now, we have assessed the growth rate at being between 0 and 2%. That's what I have to say about figures. We have set up a statistics committee to try to obtain more precise figures.

[English]

The Chairman: Merci. Are there any other comments?

Yes, Mr. Gibb.

[Translation]

Mr. Roger Gibb: Over the past eight years, there has been a decline in the hazardous waste sector—I am not talking about the overall environment sector. As for the big players in the North American hazardous waste sector, we are witnessing a decline in comparison with other industries. And here I'm referring to telecommunications, aeronautics and others. So I can support what Serge is saying, namely, that we are witnessing a decline in this sector. Prices are down, volume has dropped and companies are closing their doors. There is a great deal of consolidation occurring in our industry.

The Chairman: Thank you.

[English]

Mr. Isaacs.

Mr. Colin Isaacs: Yes, I would concur with that. The industry is changing very dramatically. A lot of smaller companies are disappearing or are being taken over by the larger companies. There is a great deal of consolidation, refocusing, etc. It is a new industry, and data are inexact at the present time. Perhaps we are intrinsically optimistic as an association. We are certainly seeing increasing support in our own membership area.

With regard to your comment on virtual elimination, our concern is related primarily to the lack of definition of the term. I have been involved personally in a great number of debates about what virtual elimination means. As our colleagues have suggested, virtual elimination, properly defined, is a very positive step for environmental progress. If badly defined, it's probably worse than useless. We were encouraging inclusion of the definition of the term in the act.

In the area of regulation, I think it's fair to say that all will support good regulation and none will support bad regulation, and there's tremendous debate about which is good and which is bad, hence our very strong suggestion for an open and transparent decision-making process, perhaps using consultative processes that bring people together to develop regulation that meets both environmental and economic goals.

The Chairman: Madame Last and Mr. Dubé each have a short comment to make.

Madame Last.

[Translation]

Ms. Rebecca Last: I would like to go back to the question of figures. The figures that we submitted to you today were prepared by Statistics Canada for 1995. Statistics Canada used the OECD definition of environmental companies and included a few figures about what we call a company own account, which means employees from other sectors who work in the environment field. This definition is a bit different from the one that you used, Mr. Cabana. In terms of growth, in the environment sector, we can compare the domestic market to the international market. The greatest growth can be found in the international market.

The Chairman: Thank you.

Mr. Dubé, a brief question, please.

Mr. Robert Dubé: Before going onto the topic of virtual elimination, to close on the figures, I should point out that our industry in Quebec is governed primarily by regulation under Quebec statutes. Many companies are still waiting for regulations that have not yet been passed, and therefore not applied—the solid waste regulations, for example. And in the area of hazardous materials, regulations have just come into force, but they took a very long time. Regulations on air quality are still pending.

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Some companies that are waiting for these regulations to be implemented can simply not survive. So we are seeing a drop in growth.

As for virtual elimination, we are very interested in the principle, rather than the definition. Our industry is largely concerned with development, or with major orders involving development of technologies to detect profitability thresholds, and substance thresholds. So most companies offering such services are interested in the principle of virtual elimination from that standpoint.

[English]

The Chairman: Merci.

We'll go for a second round, starting with Monsieur Bigras, s'il vous plaît.

[Translation]

Mr. Bernard Bigras: We will be talking about harmonization, Mr. Charbonneau.

You are of course aware that Quebec has not signed the harmonization agreement, for many reasons. One reason is that we wanted the federal government to recognize some areas of exclusive or preponderantly provincial jurisdiction, and another is that we were waiting for future statutes, including the CEPA, to see whether they would comply with the principle of harmonization, that is, eliminate duplication and overlap.

In your brief, you mentioned overlap on three separate occasions. On page 2 of its brief, the Canadian Waste Alliance also states that by adding another definition of waste, particularly at the federal level, would only make things worse.

If you have had a chance to study the issue, could you tell me whether you have identified more specific instances of overlap. We have had one example, and I can assure you that I will often be quoting the third paragraph on page 2. However, I would like to know whether you have identified more specific instances of overlap in other areas.

Mr. Serge Cabana: Yes we have, though we have not studied the issue in depth. However, I can point out three or four areas where there seems to be overlap and duplication. We are concerned about this generally. We have seen some evidence of it but we have not undertaken a systematic review to identify all instances of duplication.

Let me give you three examples. This legislation requires companies to provide information on almost all types of substances, and to submit declarations. This is a different approach, but the same requirement is stipulated in the regulations of the Quebec Ministère de l'Environnement et de la Faune. In Quebec, it is broken down by sector at the provincial level, and in this legislation, it is broken down by substance.

The second instance is the power to regulate a specific list of toxic substances. Here, we find overlap with the hazardous products regulations, and regulations governing nutrients and agricultural areas.

A third instance is the general power to regulate waste vented in the to he atmosphere. According to a presentation we heard recently on the new draft regulations on air quality, soon to be implemented in Quebec, there would be duplication in some areas here too.

Lastly, builders and facility operators are required to prepare drawings and specifications in cases where waste is to be produced. Similar provisions can be found in the Quebec statute, in section 22(31a).

We have covered only a few instances, but duplication is a significant concern, particularly since we are aware Quebec has not yet signed the harmonization agreement, as Mr. Bigras pointed out. So this situation does cause some difficulties for the Quebec environment sector. We will be saying the same thing to Quebec. We will increase the pressure to go ahead with harmonization and implement measures to reduce overlap and duplication.

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Mr. Bernard Bigras: I have another brief question.

Mr. Roger Gibb: Mr. Bigras— [Editor's Note, Inaudible]— if I may.

Mr. Bernard Bigras: Please go ahead.

Mr. Roger Gibb: First of all, there is this idea of a prevention plan. In Quebec, the government is trying to make the Quebec industry aware of its responsibilities, encouraging it to manage its companies so as to minimize environmental impact. That is a result-based management. At the federal level, the focus is rather on the methods that can be applied to achieve the results. So there is a significant difference in approach.

Secondly, on the issue of movement of dangerous waste, clause 189 provides for tariffs and fees for the transportation of hazardous waste within Canada, within a given province, or between provinces. As far as I know, transportation within a given province would currently be under provincial jurisdiction. some provinces do require waybills. Last December, Quebec abolished those waybills, though Canada apparently wants to impose them from now on, and will also be imposing fees for producing them on Quebec companies.

Thirdly, reducing hazardous waste: Any company exporting hazardous waste would have to submit a waste reduction plan. This is something any Canadian industry will be doing in any case; plans will have to be submitted to the federal government from now on. As Mr. Cabana said, this is duplication. We would spend half our time in Quebec and the other half in Ottawa.

The Chairman: Thank you.

Mr. Gallaway, you get five minutes twice. I am sorry.

[English]

Mr. Roger Gallaway (Sarnia—Lambton, Lib.): I won't be very long. I just wanted to ask Mr. Gibb some questions relative to the proposed fees to be imposed.

I'm sorry I wasn't here at the beginning, but you note in your brief that in the early nineties the Americans were going to do the same thing, but Canada opposed it and the U.S. backed off. What's changed in Canada so that we have undergone this flip-flop?

Mr. Roger Gibb: This is basically a cost recovery issue. Environment Canada, I believe, spends something in the order of $560 million, and as one of their initiatives to recover costs—they desire to recover $1.4 million of costs—the activity they've chosen, curiously, is the notification procedure in terms of the international movements of hazardous waste. There are many other activities where they could have identified an opportunity, but this is the one they've chosen, and here we are.

They've chosen a case that is clearly, in our judgment, a violation of the FTA and NAFTA, and it's something other ministries are very much in opposition to, in particular Industry Canada and Foreign Affairs and International Trade.

Mr. Roger Gallaway: I was going to ask you about that.

Secondly, then, you have made reference to a number of articles of NAFTA. Can you tell me how far you have gone with this? I presume you are a member of an association. Will your association then launch a NAFTA challenge?

Mr. Roger Gibb: Stablex will. I can't talk for the association, but it's a very important issue for us. As Mr. Cabana has mentioned, the hazardous waste industry is a mature industry, like most of the environmental industry is. In recent years we have had to make major changes in terms of cost reduction, and through our ISO certification and so forth we've been quite successful in maintaining and building our customer base.

However, $300,000 a year on a small $30-million company is a major cost, and the worst thing is that it starts with Canada, which clearly would be in violation of the letter and the spirit of the free trade agreement. It wouldn't be long before the U.S., perhaps the Quebec government and the Ontario government— And here, in terms of coming in and taking that waste, we're penalizing a successful Quebec industry, which is exporting its technology around the world, and favouring a U.S. industry.

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It's a curious turn of events and something we feel very strongly about. Certainly we would challenge it through the appropriate forums in terms of international trade. We feel it's clearly in violation of those three treaties: the bilateral, the free trade agreement and NAFTA.

Mr. Roger Gallaway: Finally, I live in southwestern Ontario and I'm quite familiar with companies like Phillips and Laidlaw, and they have expressed to me their absolute horror at this provision. Could you tell me what you foresee this provision, if enacted, will do to your company either in the short term or the long term.

Mr. Roger Gibb: Our company is basically a creation of the Minister of the Environment in Quebec. We were created to respond to industry in the eastern part of Canada, largely Quebec. However, it was recognized at the time that in order to have a major company—we're one of the largest companies in Canada in terms of expertise, 125 employees and so forth—based on Quebec waste we wouldn't be sustainable. So we've always served—and this is recognized by the governments involved—northeastern north America, including New England, New Jersey and New York. That's the way it's always been, and roughly half of our receipts, 45% to be precise, come from the United States.

Were the border to be closed, our future would be very questionable. There's no question about that. Just keep in mind that a Canadian generator can send their waste anywhere. I don't think the federal government or the Quebec government is going to tell a steel producer in Quebec, no, your waste goes to Stablex. That's not going to happen. So I think our future would be very tenuous.

Mr. Roger Gallaway: Thank you.

The Chairman: Thank you. You have no further questions? Then before concluding, may I raise a couple of questions with the people representing the industry association. On page 1 there is a paragraph that is rather disturbing; it's the last one, under “Sustainable Development”, which reads:

This is not so in Part 5, Controlling Toxic Substances, which is largely prescriptive in nature, and which does not balance the interests of industry and the economy with those of the environment.

Are we to understand that in the view of the association the economic and environmental goals are in conflict?

Mr. Colin Isaacs: Mr. Chairman, I would suggest not so much in conflict as using tools that will potentially protect the environment but cause significant economic disruption. We believe that—

The Chairman: That's fine, but when you use the term “balance” you implicitly introduce a concept of disconnection between the economy and the environment. Is what you are saying that they are not connected?

Mr. Colin Isaacs: No, Mr. Chairman. The term is not intended as if the two were in opposition.

The Chairman: But that's what “balance” implies.

Mr. Colin Isaacs: The message that is intended is that there is a need to and an opportunity to move forward both on economic and environmental objectives simultaneously. We believe the current wording of part 5 is not doing that. I would agree that the word “balance” may perhaps not be the best choice of word. We do not intend it in the confrontational use, with the old use of environment and economy being juxtaposed.

The Chairman: I appreciate that, because the term “balance” is used under the heading of sustainable development, and this is actually a term that implies an integration of economic with environmental goals. The very moment you start to disconnect the two we are in deep trouble.

Mr. Colin Isaacs: I would agree with you entirely, Mr. Chairman.

The Chairman: So what will be the revised text?

Mr. Colin Isaacs: To completely avoid use of the word “balance” in order to avoid any confusion over meaning.

The Chairman: You have my eternal gratitude for that.

Mr. Colin Isaacs: I understand.

The Chairman: Would you like to offer a definition on page 2 for the word “waste”? Would you have something that you could advance?

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Mr. Colin Isaacs: There has been a great deal of debate, provincially and nationally, over the meaning and definition of the word “waste”.

I think in some provinces we are moving a lot closer to an acceptable definition. I think some of my colleagues at the table indicated previously that materials that are going to subsequent use, recycling or reuse, should perhaps not be treated in the same way as material going to final disposal. Similarly, there are many situations where materials are caught in the definition of waste when in fact those materials are less harmful potentially to the environment than raw materials or products going for sale.

Those are the things the provincial work has tried to come around. We'd be delighted to work with the committee to identify the definitions right across the country and to show those that are moving towards a much more progressive and business-acceptable approach.

The Chairman: Thank you. That would be quite helpful.

Moving on to page 5, do you think recommendation 5 is one to be inserted in the bill, or would it not be perhaps a general policy recommendation that you are pursuing outside the bill?

Mr. Colin Isaacs: We certainly understand, Mr. Chairman, that this is not a finance bill and therefore it should not include financial requirements on the government. On the other hand, we feel very strongly indeed that there needs to be continuation of the kind of support provided in the Canadian environmental industry strategy and we wanted to take advantage of this opportunity to raise that. We continue to have concern that the infrastructure put in place over the three years of the industry strategy may not be maintained unless it's required in legislation in some form.

The Chairman: Are you not reminding us very diplomatically that this was a red book promise?

Mr. Colin Isaacs: We are indeed, Mr. Chairman.

The Chairman: Thank you, Mr. Isaacs.

Mr. Pullen, this committee is very sensitive to what you said about the taxation on recycling and the lack of taxation when compared to the virgin industry. I understood you to say that. Do you have any thoughts on this subject that you would like to advance at this time? Since we wrote the report two years ago, we may have to revisit that area.

Mr. Michael Pullen: Yes, you can get around this by a reasonable definition of the word “waste”.

Alberta has a sensible definition, and it's a very simple one and it's one that works. They say waste is a material that has no use. In guidelines they go on further to say what is not waste, which is rather unusual. What is not waste is any materials that can be reused, either re-manufactured or reused in their original form. That works for Alberta.

It's one of the more elegant ways of running an industry. If you do that, you remove recyclable materials from this whole proposal that's going before you of service costs and service taxes related to those materials, because they are not defined as the materials that are going to be taxed. That goes for hazardous materials that can be reused, recycled and refined as well as non-hazardous ones, things like plastics. There is a way out, and I think it can be simply done through a definitional change.

The Chairman: You have a definition to offer as well?

Mr. Michael Pullen: For?

The Chairman: For waste.

Mr. Michael Pullen: I would suggest the Alberta one would be a good starting place. The more complex it becomes the worse it becomes, and the more you try to put into the definition of waste the more you become bogged down in regulatory control.

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The Chairman: Are there any comments on the word “waste”?

Mr. Roger Gibb: I would suggest that the definition should be harmonized between the provinces and other international partners, rather than defining our unique Canadian definition. Clearly, in the sense of international trade, I think it has to be a definition that is coherent with OECD or other international groups.

The Chairman: So you would suggest we look at the OECD definition?

Mr. Roger Gibb: Yes.

The Chairman: That can be done.

Are there any other comments or questions? Mr. Pratt.

Mr. David Pratt (Nepean—Carleton, Lib.): Dealing with that definition of waste, it seems to me that although the Alberta definition may be elegant, as you say, Mr. Pullen, it lacks a certain utility from the standpoint of market economy. For instance, if the definition of waste in Alberta is something that has no further use, surely that's dependent upon the market—

Mr. Michael Pullen: That's right.

Mr. David Pratt: —in terms of the ability to recover and reuse it.

Mr. Michael Pullen: Yes, completely. Take the example of glass, glass reusable or glass recyclable material. On any given day there may be no market for it. That would become a waste if it were to go to final disposal. If there is a market for it, it can be sold. Then it would not be subject to the regulations of waste if it's being trucked to some plant that is reusing it.

Mr. David Pratt: But in some respects, to turn that around a little bit, the fact that there's no market for it does not mean it cannot be reused. At some point in the future, the markets change.

Mr. Michael Pullen: That's always with the proviso that the cost of storing the material doesn't exceed the cost of the value of the material. That's the situation the City of Toronto got itself into a number of years ago by saying, well, that's recyclable, but there's no market; we'll store it. The cost of the storage far exceeded the value of the material.

Mr. David Pratt: We got into the same thing with newspaper.

Mr. Michael Pullen: Yes.

The Chairman: Mr. Pullen, you have not commented on division 8, which deals with the control of movement of hazardous waste and hazardous recyclable material and of prescribed non-hazardous waste for final disposal. Do you want to offer any comments?

Mr. Michael Pullen: Yes, I'd like to.

At the present time, there is cross-border and cross-boundary movement of wastes, both hazardous and not hazardous. There is significant documentation that goes along with that in the form of manifests, bills of lading, and records at the borders. There's not quite so much record-keeping across provincial boundaries because, after all, we are still one country.

Those records are there, and duplication of that record-keeping system for the purposes of the federal government is pure duplication. To reduce deficits, various governments across Canada are imposing service fees on monitoring data at the provincial level, and now we're getting the federal level too, so we're getting a duplication in costs. We don't know where that falls out, because these are proposals at the provincial level right now. Needless to say, we're saying the same words to the provincial governments as we're saying to you.

Waste is a strange substance. It's a commodity with a negative value. It is sought after to maintain industries. A landfill without waste will run a lot of costs. It will run you clearly into the red, so you have to have a feed source to the landfill. You have to have a feed source to an incinerator or an energy-from-waste plant.

Waste is sought after, and in that sense it's a commodity. It has flowed—

The Chairman: It can have positive values, too.

Mr. Michael Pullen: That's correct; it can have positive values, too. Businesses make money out of waste. In restricting cross-border or cross-boundary movement of waste, you are restricting trade, and as the gentleman here said, that is clearly not the intent of NAFTA. It only is a matter of time before someone picks up and ball and says, hold it, this has to be tested in a court of law or some tribunal to make a judgment on it.

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The Chairman: We are controlling the trade of tobacco and we are controlling the trade of liquor, so what would be the logical step of controlling hazardous waste?

Mr. Michael Pullen: It's only if it suits the environment to protect it. If you know the material is going to go to a substandard facility that is lesser than the standards in that country, then there's reason to control it, but I would contest any other reason to control it.

The Chairman: Mr. Gibb, you wanted to comment?

Mr. Roger Gibb: I'd like to add a couple of issues. One, this notification procedure was put in place in 1986 as a result of the bilateral agreement with the United States. It was an international commitment that was responding to two issues, one of which was public safety in terms of the movement of hazardous waste, and the second of which was the environmentally responsible treatment of hazardous waste.

The perception, for some reason, at Environment Canada is that this notification procedure is benefiting our industry. We don't need this notification. We didn't have it prior to 1986, and we don't need it today. We could have registers, which Quebec has been doing now since December 1. We could electronically monitor this movement ourselves. But because of international commitments, the Canadian government must maintain this monitoring.

This morning I was thinking about this. I drew a parallel with the Canadian embassy. We have embassies around the world. When I go to the embassy in Beirut or Paris, do I pay a fee to deal with the Canadian embassy? No. The Canadian embassy there is to further trade and maintain diplomatic relations and so forth. As a user, as a Canadian, I don't pay for the service of a Canadian embassy offshore, nor should I pay as a user of that notification procedure. That procedure is there for the public good and because of international requirements.

The Chairman: Madam Kraft Sloan, you wanted to ask a question?

Mrs. Karen Kraft Sloan: It's my understanding that waste will be defined through regulation.

Mr. Roger Gibb: That's my understanding too.

Mrs. Karen Kraft Sloan: So this still gives you unease?

Mr. Roger Gibb: Well, I didn't bring up that point. I'll defer to some of my partners here.

Mr. Michael Pullen: We were led to believe by Environment Canada staff that the definition of waste for the purposes of this act would be done by regulation.

The Chairman: What is the advantage, in your opinion?

Mr. Michael Pullen: For regulation?

The Chairman: For the definition being in the regulation.

Mr. Michael Pullen: Putting something in regulation is traditionally used by governments to change things rapidly without having them before the floor of the House in legislation. So if there is a problem with a definition, it can be changed relatively quickly. That's traditionally why governments use regulations.

The Chairman: Yes, we are aware of that. The definition of waste is important enough to warrant some discussion here.

Mrs. Karen Kraft Sloan: Mr. Chair, I go back to the earlier discussion around the definition of waste that Alberta has used. If you say it's something that has no use, that's a moving definition, because it really speaks to a process more than a particular product or substance.

If we follow the preachings of Hawken in The Ecology of Commerce, he talks about how immature our commerce is. He says that what we should really be moving towards is not just the management of the birth to death of products, but birth to death to birth of products. He says we waste too much of our waste. So as we refine our processes and understand better how we're manufacturing things and making things less toxic, then we can start to use those end products in another product. As well, we find ways to continually utilize waste.

So it's a moving definition, and I'm not entirely sure what the implications would be for something like that. I would suggest that maybe you would have an exemption for the human species in that definition, otherwise we might capture certain members of society that will be managed through CEPA. I don't know. Obviously, this is an important issue for us to address.

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Mr. Michael Pullen: I brought Alberta up as an example. There are examples all across the country of definitions of waste, of course.

Not to put words in the mouths of legislators in Alberta, but from a practical operator's point of view, that definition does work. As soon as material has no feasible use and must go to final disposal, whatever the means of final disposal, it safeguards the environment. If it's not being re-manufactured and reused, which is a safe way of doing it, then it falls under the definition of waste. The controls under waste for disposal are there, so it is being safeguarded from that point of view as well.

Your comment on philosophy is very interesting. Yes, we do waste too much of our waste, and a lot of dirty waste has to be disposed of because we have no mechanism to clean it and make it marketable.

But having said that, it's all driven by value, and when value approaches zero it must be disposed of. So until you get value under control—I would suggest that you don't do it by subsidy—waste will continue to be disposed of.

Mrs. Karen Kraft Sloan: But that to me is going to create difficulty in operationalizing it, because some people value things that other people don't value.

I've heard people refer to the north as a barren wilderness. But when I go to the north, I see a land teeming with life and very dynamic. We see household goods that are discarded by individuals as worthless, yet someone else would come along and pick it up and be glad to find such an incredible treasure because they're an artist or they've found a way to make it work again.

So we're getting into a philosophical debate as to what value is and what use is. That really poses difficulties for people who have to operationalize it, both on the side of government and on the side of business.

Mr. Michael Pullen: The problem with it is that an article can have value in one location but not be identified as an article that has value in another location. In other words, there's no communication of that value. That's a problem to the operators. How does one person know a lamp has value to someone else 10 miles away without communicating with that person? It's a communication problem for us.

The Chairman: Take a situation, Mr. Pullen, whereby waste that has zero value is dumped in a landfill, which then eventually produces methane, which then eventually is used for district heating. So what was originally a zero-value waste all of a sudden has a value. How do we handle that process?

Mr. Michael Pullen: It's okay.

The Chairman: It's okay with you. So it has more than zero value eventually.

Mr. Michael Pullen: If it's organic, yes.

The Chairman: Oh, you're talking inorganic, are you?

Mr. Michael Pullen: You have to take a piece and talk about a piece of it. You can't take the whole thing.

The Chairman: Well, legislators are faced with a dilemma too, you know.

Mr. Colin Isaacs: If I might interject, Mr. Chairman, I suggest that the line of discussion highlights one of the difficulties with the incremental progress that we are currently making in the area of sustainable development. This perhaps relates back to Mr. Gilmour's very first question as to whether this act is a step forward or not. There's no doubt it is a step forward, but it's an incremental process that is moving from environmental protection to sustainable development while keeping some elements of environmental protection. Indeed, as you so wisely pointed out, some of the language of environmental protection creeps in, unfortunately.

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We are moving from a situation of government regulation of activity to performance-based regulation and economic instruments and voluntary initiatives, but keeping some of each. I suggest that this question of the definition of waste falls into that category. We still find it necessary to regulate something we call waste, and to regulate primarily through a command and control approach, yet perhaps the concept of sustainability and the approach Mrs. Kraft Sloan was suggesting would suggest we should be looking more at environmental impacts of materials, whether or not they are waste, rather than trying to define a specific category.

I think at some point—and I'm not suggesting we're there yet—we reach the limit of the incremental approach toward sustainable development and have to move away from all old environmental protection thinking and into a new arena where we are not looking at things as to whether or not they fit into a definition. We're looking at them in terms of the positive or negative contribution to sustainability.

The Chairman: Well, Mr. Isaacs, it wouldn't be the first time you had the last word, but Madam Kraft Sloan has something to say. Then we'll conclude.

Mrs. Karen Kraft Sloan: All of this is very difficult, I guess, and requires a lot of very innovative thinking. I would hate to suggest that the weight of achieving sustainability be put on the lap of government in a way that we have to move away from incremental environmental protection, because what is required is a whole new way of thinking about how we design our systems. There's a requirement on industry to do the same thing.

I think the reality is that, as legislators, we have to find ways to encourage the progressive leaders in the field, and the people who understand that we have to redesign, that we're talking about a design problem, a systems problem, an overall problem, to give the dinosaurs a whack on the head. Otherwise, they're not going to move along.

We're in a transition, and it is very difficult. On the one hand, you have to maintain the incremental side. You have to maintain the stick, because they ain't going to listen otherwise. That's a reality. If they did, we wouldn't have an environment committee. We wouldn't have an environment department. That's a reality.

On the other hand, we have to have another parallel approach that brings us into the new ecological paradigm, which is not easy.

The Chairman: Perhaps this is the beginning of our real meeting, at 11 o'clock. It's a pity we have to conclude now. It was a good exchange.

On behalf of the committee, I would like to thank you all for your participation, your advice, your input. We'll certainly remember what you said. You may even come back again, who knows?

Mr. Serge Cabana: Mr. Chairman, we will provide you with a text in the next few days.

The Chairman: Yes, please. Do that.

This meeting is adjourned.