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OECD Environmental Performance Reviews
OECD Environmental Performance Reviews CANADA
This book is part of the OECD Environmental Performance Reviews Programme which conducts peer reviews of environmental conditions and progress in each member country. It scrutinises efforts to meet both domestic objectives and international commitments. The analyses presented are supported by a broad range of economic and environmental data and lead to recommendations for further environmental and sustainable development progress. A first cycle of OECD Environmental Performance Reviews, covering all member countries, was completed in 2000. The second cycle focuses on environmental management, sustainable development and international commitments.
Latest reviews available • Australia • Switzerland • Belgium • Czech Republic • Denmark • Russian Federation* • Turkey • Hungary • Greece • Ireland • Luxembourg • OECD countries • Germany • Iceland • Norway • Portugal • Slovak Republic • Japan • United Kingdom • Italy • Netherlands • Poland • Mexico • Austria • Canada
1998 1998 1998 1999 1999 1999 1999 2000 2000 2000 2000 2001 2001 2001 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004
* Non-OECD member country.
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OECD Environmental Performance Reviews CANADA
Topics covered: Environmental Management Air and Water Management Nature and Biodiversity Management Economy, Society and Environment Sectoral Integration: Chemicals International Co-operation
CANADA
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OECD Environmental Performance Reviews
CANADA
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations. The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).
Publié en français sous le titre : Examens environnementaux de l’OCDE CANADA
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FOREWORD The principal aim of the OECD’s Environmental Performance Reviews programme is to help member countries improve their individual and collective performances in environmental management with the following primary goals: – to help individual governments assess progress; – to promote a continuous policy dialogue among member countries, through a peer review process; and – to stimulate greater accountability from member countries’ governments towards their public opinion, within developed countries and beyond. Environmental performance is assessed with regard to the degree of achievement of domestic objectives and international commitments. Such objectives and commitments may be broad aims, specific qualitative goals, precise quantitative targets or a commitment to a set of measures to be taken. Assessment of environmental performance is also placed within the context of historical environmental records, the present state of the environment, the physical endowment of the country in natural resources, its economic conditions and demographic trends. These systematic and independent reviews have been conducted for all member countries as part of the first cycle of reviews. The OECD is now engaged in the second cycle of reviews directed at promoting sustainable development, with emphasis on implementation of domestic and international environmental policy, as well as on the integration of economic, social and environmental decision-making. The present report reviews Canada’s environmental performance. The OECD extends its most sincere thanks to all those who helped in the course of this review, to the representatives of member countries to the Working Party on Environmental Performance, and especially to the examining countries (Australia, Austria and France) and their experts. The OECD is particularly indebted to the Government of Canada as well as those of Ontario and Quebec for their co-operation in expediting the provision of information and the organisation of the experts’ mission to Canada, and in facilitating contacts with many individuals both inside and outside administrative and governmental structures. The present review benefited from grant support from Japan, Norway and Switzerland.
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The OECD Working Party on Environmental Performance conducted the review of Canada at its meeting on 13-14 January 2004 and approved its conclusions and recommendations. This report is published under the authority of the SecretaryGeneral of the OECD.
Lorents G. Lorentsen Director, Environment Directorate
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TABLE OF CONTENTS 1. CONCLUSIONS AND RECOMMENDATIONS ........................................
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1. Environmental Management ........................................................................ Implementing more efficient environmental policies .................................. Air................................................................................................................. Water ............................................................................................................ Nature and biodiversity ................................................................................ 2. Towards Sustainable Development .............................................................. Integration of environmental concerns in economic decisions .................... Integration of environmental and social concerns........................................ Sectoral integration: chemicals .................................................................... 3. International Commitments..........................................................................
16 16 18 19 21 23 23 24 26 28
Part I ENVIRONMENTAL MANAGEMENT 2. AIR MANAGEMENT.....................................................................................
31
Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Policy Objectives.......................................................................................... 2. Performance in Meeting the Policy Objectives............................................ 3. Integration of Air Management in Transport Policies.................................. 4. Integration of Air Management in Energy Policies......................................
32 32 33 36 40 44
3. WATER MANAGEMENT .............................................................................
51
Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Policy Objectives.......................................................................................... 2. Ambient Water Quality ................................................................................ 2.1 Water quality in rivers ........................................................................ 2.2 The Great Lakes.................................................................................. 2.3 Groundwater quality ........................................................................... 2.4 Coastal water quality .......................................................................... 3. Water Use and Drinking Water Supply ........................................................ 3.1 Water use ............................................................................................ 3.2 Drinking water supply ........................................................................
52 52 53 57 57 58 60 60 60 60 62
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4. Connection to Sewerage and Waste Water Treatment.................................. 4.1 Municipal waste water........................................................................ 4.2 Industrial waste water......................................................................... 4.3 Policy framework ............................................................................... 5. Integrating Agricultural and Water Policies................................................. 5.1 Nutrients ............................................................................................. 5.2 Pesticides ............................................................................................ 5.3 Adverse weather risks......................................................................... 6. Expenditure, Financing and Water Charges ................................................. 6.1 Expenditure......................................................................................... 6.2 Municipal water charges and financing.............................................. 6.3 Economic instruments ........................................................................
64 64 66 66 67 68 69 69 70 70 71 72
4. NATURE AND BIODIVERSITY MANAGEMENT ...................................
73
Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Policy Objectives.......................................................................................... 2. Biodiversity .................................................................................................. 3. Protected Areas ............................................................................................ 3.1 Terrestrial ecosystems......................................................................... 3.2 Aquatic ecosystems ............................................................................ 4. Forest Management ...................................................................................... 4.1 Forest biodiversity .............................................................................. 4.2 National Forest Strategy ..................................................................... 4.3 Sustainable forest management .......................................................... 5. International Co-operation ...........................................................................
74 74 75 76 80 83 84 85 85 86 88 91
Part II SUSTAINABLE DEVELOPMENT 5. ENVIRONMENTAL-ECONOMIC INTERFACE ......................................
95
Recommendations.............................................................................................. Conclusions ....................................................................................................... Integration of environmental concerns in economic decisions .................... Implementing more efficient environmental policies .................................. 1. Towards Sustainable Development .............................................................. 1.1 Decoupling environmental pressures from economic growth............ 1.2 Sustainable development and institutional integration....................... 1.3 Sustainable development and market-based integration .................... 1.4 Pollution abatement control and environmental expenditure ............. 2. Environmental Policy Implementation......................................................... 2.1 Environmental policy objectives ........................................................
96 96 96 97 98 98 102 106 112 115 115
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2.2 2.3 2.4 2.5 2.6
Intergovernmental institutional structures .......................................... Implementation and enforcement of legislation ................................. Economic instruments ........................................................................ Land use planning............................................................................... Role of industry ..................................................................................
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116 118 122 125 126
6. ENVIRONMENTAL-SOCIAL INTERFACE.............................................. 131 Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Environment, Health and Safety .................................................................. 1.1 Environmental pollution and human health ....................................... 1.2 Natural disasters and environmental emergencies.............................. 2. Environment and Employment..................................................................... 2.1 Environmental industry and environmental employment .................. 2.2 Active environmental employment policies ....................................... 3. Environmental Disparities............................................................................ 3.1 Access to natural resources................................................................. 3.2 The North............................................................................................ 4. Environmental Democracy........................................................................... 4.1 Environmental knowledge management ............................................ 4.2 Public access and participation...........................................................
132 132 133 133 135 139 139 140 141 141 145 148 148 149
7. SECTORAL INTEGRATION: CHEMICALS ............................................ 153 Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Environmental Pressures from Chemicals ................................................... 1.1 The chemicals sector in Canada ......................................................... 1.2 Risks for health and environment....................................................... 2. Overall Policy Objectives and Institutional Framework .............................. 3. Policy Responses.......................................................................................... 3.1 Examination of existing substances under CEPA............................... 3.2 Notification of new substances under CEPA...................................... 3.3 Management of risks to human health and the environment: federal and provincial government initiatives .................................... 3.4 Management of risks for human health and the environment: other initiatives ................................................................................... 3.5 Public information: National Pollutant Release Inventory (NPRI) under CEPA ........................................................................................ 3.6 Pesticides ............................................................................................ 4. Regional and International Activities and Commitments ............................ 4.1 Bilateral co-operation ......................................................................... 4.2 Multilateral co-operation ....................................................................
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154 154 155 155 156 159 161 161 163 164 165 166 167 167 167 168
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Part III INTERNATIONAL COMMITMENTS 8. INTERNATIONAL CO-OPERATION......................................................... 169 Recommendations.............................................................................................. Conclusions ....................................................................................................... 1. Objectives..................................................................................................... 2. Environmental Management along the Borders........................................... 2.1 Transboundary air pollution ............................................................... 2.2 The Great Lakes and transboundary waters ....................................... 2.3 Transboundary waste management..................................................... 3. Marine Issues................................................................................................ 3.1 Marine pollution ................................................................................. 3.2 Marine fisheries .................................................................................. 4. Climate Change ............................................................................................ 4.1 Progress so far .................................................................................... 4.2 Present climate policy implementation .............................................. 4.3 Future developments and assessment ................................................. 5. Trade and Environment ................................................................................ 5.1 Integrating trade and environmental policies ..................................... 5.2 Trade of specific items........................................................................ 5.3 Certification, export credits and guidelines for multinational enterprises 6. Development Assistance .............................................................................. 6.1 Total ODA .......................................................................................... 6.2 Environmental ODA........................................................................... 6.3 Other environmental assistance .......................................................... 7. The Pursuit of Sustainable Development .....................................................
170 170 171 176 176 179 181 182 182 184 187 187 190 193 194 194 194 196 197 197 198 199 199
REFERENCES I.A I.B I.C II.A II.B III. IV. V. VI.
Selected environmental data........................................................................... Selected economic data .................................................................................. Selected social data ........................................................................................ Selected multilateral agreements (worldwide) ............................................... Selected multilateral agreements (regional) ................................................... Abbreviations ................................................................................................. Physical Context............................................................................................. Selected Environmental Events (1995-2003)................................................. Selected Environmental Web Sites ................................................................
202 204 206 208 212 214 218 220 228
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LIST OF FIGURES, TABLES AND BOXES Figures Map of Canada ........................................................................................................ 2.1 Air pollutant emissions................................................................................... 2.2 Trends in the transport sector ......................................................................... 2.3 Road fuel prices in Canada and the United States.......................................... 2.4 Energy structure and intensity ........................................................................ 3.1 Water use ........................................................................................................ 3.2 Population connected to public waste water treatment plants........................ 3.3 Agricultural inputs.......................................................................................... 4.1 Fauna and flora ............................................................................................... 4.2 Protected areas................................................................................................ 4.3 Forest .............................................................................................................. 5.1 Economic structure and trends ....................................................................... 5.2 Trends in agricultural support......................................................................... 5.3 Road fuel prices and taxes.............................................................................. 6.1 Social indicators ............................................................................................. 7.1 Change in emissions of selected toxic substances.......................................... 7.2 Toxic contaminants in cormorant eggs........................................................... 7.3 Atmospheric emissions of mercury ................................................................ 8.1 Cod TACs and landings on Canada's Atlantic coast ...................................... 8.2 CO2 emission intensities................................................................................. 8.3 Canada’s GHG emission trends and forecast ................................................. 8.4 Official development assistance ..................................................................... Tables 2.1 Atmospheric emissions by source .................................................................. 2.2 Canada’s performance in meeting domestic and international air pollution commitments................................................................................... 2.3 Trend in air quality in Canada ........................................................................ 2.4 Energy prices in Canada................................................................................. 3.1 Selected recent water-related laws, strategies and plans ................................ 3.2 Water quality index by water quality category............................................... 3.3 Canadian releases of persistent toxic substances in Great Lakes basin.......... 3.4 Population connected to public waste water treatment plants........................ 4.1 Species at risk under provincial jurisdiction .................................................. 4.2 Protected areas managed at the federal level..................................................
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13 37 42 44 46 61 65 68 78 81 87 100 109 111 143 157 158 159 185 189 191 197 36 38 40 47 55 58 59 65 79 82
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5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 6.1 6.2 6.3 8.1 8.2 I.A I.B I.C II.A II.B
OECD Environmental Performance Reviews: Canada
Economic trends and environmental pressures .............................................. Fisheries federal adjustment programmes ...................................................... Pollution abatement and control (PAC) expenditure...................................... Public PAC expenditure.................................................................................. Provincial and local governments’ PAC expenditure..................................... Inspection and enforcement activities ............................................................ Non-compliance rates..................................................................................... Selected market-based instruments ................................................................ Selected voluntary approaches ....................................................................... Major environmental emergencies ................................................................. Environmental industry .................................................................................. Population and GDP ....................................................................................... Regional and global environmental conventions signed, ratified or acceded to by Canada .................................................................... Annual growth in Canada’s GHG emissions and economy ........................... Selected environmental data........................................................................... Selected economic data .................................................................................. Selected social data ........................................................................................ Selected multilateral agreements (worldwide) ............................................... Selected multilateral agreements (regional) ...................................................
Boxes 2.1 Main features of the transport sector .............................................................. 2.2 Main features of the energy sector ................................................................. 2.3 Fiscal incentives to encourage renewable energy development..................... 3.1 A new Provincial Water Policy: Quebec........................................................ 3.2 Dysfunctions in drinking water supply: Walkerton and North Battleford ..... 3.3 Water resource management in Alberta ......................................................... 4.1 Canada’s international efforts towards sustainable forest management......... 4.2 Bilateral and regional fish, wildlife and nature management......................... 5.1 Major economic trends ................................................................................... 5.2 New agri-environmental measures in Canada................................................ 5.3 The legal framework ...................................................................................... 6.1 Social context: demographic, regional and socio-economic trends ............... 6.2 Climate change and the Inuit of northern Canada .......................................... 6.3 Ontario’s Environmental Bill of Rights and Environment Commissioner .... 7.1 Mining ............................................................................................................ 7.2 Examples of policy instruments and chemicals risk management ................. 7.3 The Toxic Substances List ............................................................................. 8.1 Acting against stratospheric ozone depletion ................................................. 8.2 Sustainable development initiatives ............................................................... 8.3 The Arctic....................................................................................................... 8.4 Collapse of the Atlantic cod fishery ...............................................................
101 109 113 114 115 121 121 123 127 136 140 144 172 188 202 204 206 208 212 41 45 50 56 57 62 89 92 99 108 119 142 146 152 156 162 163 174 175 178 185
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Signs The following signs are used in Figures and Tables: . .: not available. –: nil or negligible. .: decimal point. Country Aggregates OECD Europe: All European member countries of the OECD, i.e. countries of the European Union plus the Czech Republic, Hungary, Iceland, Norway, Poland, the Slovak Republic, Switzerland and Turkey. OECD:
The countries of OECD Europe plus Australia, Canada, Japan, the Republic of Korea, Mexico, New Zealand and the United States.
Country aggregates may include Secretariat estimates. The sign * indicates that not all countries are included. Currency Monetary unit: Canadian dollar (CAD). In 2003, CAD 1.404 = USD 1. Cut-off Date This report is based on information and data available up to January 2004.
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LIST OF TEAM MEMBERS Mr. Marc Aviam Mr. Gerhard Omersu Mr. Andrew Ross
Expert from reviewing country: France Expert from reviewing country: Austria Expert from reviewing country: Australia
Mr. Christian Avérous Mr. Gérard Bonnis Ms. Kumi Kitamori Ms. Laurence Musset Mr. Eduard Goldberg Mr. Bill Long Mr. Michel Potier
OECD Secretariat OECD Secretariat OECD Secretariat OECD Secretariat OECD Secretariat (Consultant) OECD Secretariat (Consultant) OECD Secretariat (Consultant)
Mr. Edmundo Claro Mr. Carlos de Miguel
Observer: Chile Observer: UN-ECLAC
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Map of Canada Land use in Canada
RUSSIA Arctic Ocean
Permanent Arable and grassland permanent 3% crop land 4%
GREENLAND (DENMARK)
Beaufort Sea Yuk o n River
UNITED STATES
River Mackenzie
Whitehorse
Great Bear Lake
Northwest Nunavut Territories Yellowknife
Baffin Island
Labrador Sea
Great Slave Lake
British Columbia
Lake Athabasca
Victoria Vancouver Calgary Saskatoon
Churchill
Hudson Bay Quebec
Manitoba Lake Winnipeg
Regina Winnipeg
Ontario
Fredericton
Thunder Bay Lake Superior
Lake Michigan
Quebec Montreal r w
a er .L St Lake Ontario
Ottawa Toronto Lake Erie
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St. John’s
James Bay
Lake Huron
UNITED STATES
Newfoundland and Labrador
en ce
Edmonton
Saskatchewan
Ri v
Fras e Rive r r
Alberta
Source: OECD.
Forest and other wooded land 45%
Baffin Bay
Dawson Yukon Territory
Pacific Ocean
Other areas 47%
Prince Edward Island Sydney Halifax Nova Scotia New Brunswick
Atlantic Ocean
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1
CONCLUSIONS AND RECOMMENDATIONS* The Canadian economy grew by 39% overall between 1990 and 2002 (despite an economic slowdown, along with the global downturn in 2001) while the population increased by 13% to reach 31 million today. GDP per capita is among the highest in the OECD area. With trade liberalisation Canada’s economy has become more export-oriented and more closely linked to the economy of the United States; the US now accounts for three-quarters of Canadian exports and two-thirds of its imports. Natural resources continue to make an important contribution to Canada’s economy. Agriculture, forestry and fishing represent 13.6% of GDP. Canada accounts for about 40% of world exports of softwood lumber and is a major exporter of wheat and fish, as well as of energy products and minerals. The provinces and territories play an active role in economic development, particularly with respect to manufacturing in Ontario and Quebec, fishery in the Atlantic provinces, forestry in British Columbia, agriculture and oil and gas production in the prairie provinces, and mining in the North. Despite Canada’s very low population density, pollution and natural resource depletion issues have continued to be politically significant over the years. Decoupling of environmental pressure from economic growth has been achieved in some areas (e.g. SOx and NOx emissions), but Canada still faces challenges associated with high energy intensity, biodiversity loss, and fishery resource depletion. Today the priority environmental issues include climate change, health protection, nature protection, air and water quality, waste water collection and waste disposal. As the goal of environmental protection is not explicitly embodied in Canada’s Constitution, environmental federalism implies that specific environmental governance issues are to be addressed by federal, provincial or territorial authorities. Although sustainable development is a major * Conclusions and Recommendations reviewed and approved by the Working Party on Environmental Performance at its meeting in January 2004.
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stimulus for changes in governmental structure and behaviour, it still largely remains to be translated into practical institutional and market-based integration. To meet these challenges, it will be necessary for Canada to: i) thoroughly implement its environmental policies, improving their cost-effectiveness and inter-jurisdictional co-ordination; ii) further integrate environmental concerns into economic and sectoral decisions; and iii) pursue its international environmental co-operation. This report examines progress made by Canada since the previous OECD Environmental Performance Review in 1995, and the extent to which the country’s domestic objectives and international commitments are being met. It also reviews progress in the context of the OECD Environmental Strategy.* Some 42 recommendations are made that could help strengthen Canada’s environmental progress in the context of sustainable development.
1.
Environmental Management Implementing more efficient environmental policies
Since the mid-1990s Canada has made many significant improvements in its environmental policies. It has presented some major intergovernmental policy statements, including a Canada-wide Acid Rain Strategy, Canada-wide Standards for Particulate Matter and Ozone, and agreements on harmonisation of assessments, approvals, monitoring and enforcement. The legislative framework has been substantially enhanced, notably through the 1999 Canadian Environmental Protection Act (CEPA). Comprehensive compliance and enforcement policies and strong public reporting mechanisms have been developed to support these efforts. Environmental impact assessment legislation has been strengthened, with improved intergovernmental and interagency co-ordination and with better public reporting and follow-up. The federal government is promoting increased awareness of economic instruments through the National Round Table on the Economy and the Environment. Federal and provincial governments are also continuing substantial analytical and design work on instruments (e.g. trading of GHG, SOx and NOx emissions permits). The federal government has reviewed Canadian experience with voluntary approaches and has developed a policy framework to enhance their effectiveness. * Objectives of the “2001 OECD Environmental Strategy for the First Decade of the 21st Century” are covered in the following sections of these Conclusions and Recommendations: maintaining the integrity of ecosystems (Section 1), decoupling of environmental pressures from economic growth (Sections 2.1 and 2.3), integration of social and environmental concerns (Section 2.2) and global environmental interdependence (Section 3).
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Following a period of devolution of environmental responsibilities to the territories and within some provinces, and despite efforts to strengthen the implementation of legislation, doubts remain about the capacity to fully implement and enforce legislation and standards at federal level (e.g. the CEPA agenda on toxics) and sometimes at provincial level. In the second half of the 1990s there were large cuts in federal and provincial environmental budgets as a result of fiscal consolidation efforts at both levels of government. This was followed in the early 2000s by increases in the federal and some provincial environmental budgets. Overall, total pollution abatement and control expenditure (i.e. public and private, investment and current) reaches 1.1% GDP, on the lower side among G7 countries. Actual use of economic instruments (e.g. environmental charges, environmental trading) could be expanded. The wide use of voluntary approaches has not always been effective or efficient. Concerning the polluter pays principle, to which Canada subscribes, further progress could be made in internalising pollution externalities and reducing government financial assistance to pollution abatement and control, thereby increasing the cost-effectiveness of environmental policies and contributing to an environmental “level playing field”. Further recognition of economic opportunities for environmental products and technologies could be pursued. Greater intergovernmental co-ordination is required to ensure continued progress on several key policy issues (e.g. climate change, water catchment area management).
Recommendations: • further implement federal and provincial environmental legislation, ensuring that federal and provincial compliance and enforcement programmes are well co-ordinated and adequately resourced; • consider ways to improve the cost-effectiveness of environmental policies by extending the use of economic instruments such as charges for water supply and air and water pollution; further implement emissions trading schemes (e.g. for greenhouse gases, SOx and NOx); • continue to develop cost-effective voluntary approaches within industry, ensuring that these approaches are consistent with Environment Canada’s 2001 policy framework; • review the economic efficiency and environmental effectiveness of various incentive schemes proposed under current or planned environmental programmes (e.g. for air, water, waste management) and apply more rigorously the polluter pays principle and the user pays principle.
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Air SO2 emissions have decreased significantly over the last ten years, largely as a result of provincial reduction targets implemented through regulations or voluntary approaches. Consequently, sulphate loads affecting eastern Canada have been reduced and lake sulphate levels have shown considerable improvement. Ambient levels of NOx, SOx, CO and total suspended particles have decreased in urban areas. Canada-wide standards have recently been endorsed for PM2.5 and ground-level ozone, as well as some toxic substances such as benzene, dioxins, furans and mercury, with targets to be achieved by 2010. Increasingly stringent emission standards for motor vehicles have been adopted; by 2010 national standards on NOx and VOCs will be aligned with US standards. Progress has been made in improving periodic vehicle emission inspections. New regulations will reduce the sulphur content of road fuel to 15 parts per million for diesel by 2006, and to an average of 30 ppm for gasoline by 2005 (from the current levels of 500 ppm and 150 ppm, respectively). Most direct subsidies to the fossil fuel supply industries have been reduced if not eliminated in recent years. Concerning energy efficiency, voluntary sector-specific targets have been defined and continuously evaluated; comprehensive regulation has been issued for energy efficient appliances and buildings, as well as standards and guidelines for energy efficient technology. Significant federal investment has been committed for energy efficient infrastructure, including through Green Municipal Funds. The share of renewable energy (including large hydro) in total energy supply has remained relatively high (16%). A target has been established requiring that 10% of new electricity generating capacity come from emerging renewable sources such as wind, solar, biomass and small hydro. Production incentives (for wind energy), purchase refunds and fiscal concessions have been granted to develop the use of renewable energy sources. An emissions trading scheme for SO2 and NO was recently launched, targeting large emitters in Ontario’s electricity sector; the design of this scheme could be improved. However, emissions of traditional air pollutants in Canada remain very high compared with most OECD countries. While new initiatives were signed recently aimed at further progress in air management, the 1991 Geneva (VOCs) and 1999 Gothenburg (acidification, ground-level ozone) Protocols to LRTAP have not yet been ratified. NOx and VOC emissions have increased since the early 1980s, partly reflecting sustained growth in vehicle use. Lake sensitivity to acid rain is greater than initially thought; a further 75% reduction in SO2 emissions, beyond current commitments, may be needed in some regions. Although levels of primary airborne pollutants have decreased, many parts of Canada (both urban and rural) continue to experience unacceptable air quality,
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including for fine particles and ground-level ozone (there are high levels in the Windsor-Quebec City corridor). Canada is still characterised by high energy intensity. Ongoing market liberalisation of the energy sector could depress electricity prices. Road fuel prices have been virtually unchanged in the last ten years. They are still much lower than the OECD average, though higher than prices in the US. The use of economic instruments could be expanded. The instruments used either have little incentive effect (e.g. motor vehicle tax rebate) or primarily respond to objectives other than environmental ones (e.g. bio-diesel tax rebate). The 2001-03 Sustainable Development Strategy of Transport Canada suggests moving towards “full cost pricing” with transport costs reflecting, to the extent possible, full economic, social and environmental costs.
Recommendations: • further reduce SO2 and NOx emissions (in line with 2010 targets) using the most cost-effective available policy measures (e.g. emissions trading in polluted areas, air emission charges, binding air emission standards and voluntary approaches); set a reduction target for VOC emissions and ratify the Gothenburg Protocol to the Convention on Long-range Transboundary Air Pollution (LRTAP); • ensure proper implementation of Canada-wide Standards for ambient concentrations of PM2.5 and ground-level ozone by 2010; • improve the design of Ontario’s NO and SO2 emissions trading scheme, particularly by extending its source coverage and by fixing an overall emission cap; • reduce the energy intensity of the economy and increase the share of lowemission energy sources, particularly through further internalising environmental externalities in energy prices for industry and households; • expand use of economic instruments in the transport sector (e.g. tax breaks for individuals using public transport, incentives to promote shift from road to rail freight transport, incentives to purchase fuel-efficient vehicles, gasoline taxation).
Water Canada has moved in recent years towards a more strategic approach to water resource management. Several provinces have modernised their water legislation, as well as adapting comprehensive water management strategies or
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plans for the first time. The river basin approach already applied in some major watersheds (e.g. the Great Lakes) is being extended to other catchments. Further progress was made during the review period in reducing water demand in the electricity and manufacturing sectors. Industrial pollution loads, including toxics in the Great Lakes, have also been reduced. While settlement patterns have ruled out substantial growth in municipal sewerage connection rates beyond the current three-quarters of the population, the proportion of sewered waste water that is untreated before discharge has fallen from 10.6% of the population in 1991 to 2.5%. The level of treatment has improved; the share of the total Canadianpopulation benefiting from secondary or tertiary treatment increased over ten years from 47.5 to 57.9%. A more rigorous approach is being taken to reducing the environmental impacts of agriculture on the water environment. However, slow progress with the clean-up of the Great Lakes demonstrates the difficulty of restoring impaired ecosystems. Following some decentralisation and delegation of water management responsibilities in some parts of the country, Canada experienced two major drinking water contamination incidents resulting in deaths. These incidents shook public confidence throughout Canada and jolted authorities into closely scrutinising drinking water management practices, including protection of source areas. Large increases in animal manure production, particularly from rapidly expanding piggeries in Quebec and Ontario, are of special concern in this regard. Moreover, poor inspection and maintenance of septic tanks serving over one-quarter of the population is a safety risk for the many wells that are the main source of individual water supply in rural areas. Residential water use per capita has increased. At the current rate of progress, it could take another 20 years or so for Canada to extend and upgrade its water infrastructure to the level required. Inadequate attention has been given so far to groundwater resources management. Despite the long-standing intention to increase efficiency of water and waste water services, and to implement the user and polluter pays principles, much remains to be done to achieve these objectives. For instance, user fees still cover only part of the cost of delivering water services, while fee structures generally do not encourage conservation. Subsidies and financial transfers are too often expected to take care of financial gaps. Provincial governments and municipalities should often take a more positive approach to full-cost water pricing, which might allow more rapid renewal of existing assets. Better harmonised and more up-to-date provincial/territorial monitoring data on the quality of Canada’s water resources, and water-related economic information, should support these efforts.
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Recommendations: • firmly implement water management policies, including provincial water strategies (e.g. basin management, ecosystem approach, stakeholder participation) and enforcement of regulations (e.g. inspections, sanctions); accelerate the development of integrated water resource management and water efficiency plans; • improve efficiency in the delivery of water and waste water services, through improved governance (e.g. consolidation of operators, quality assurance, accountability mechanisms), improved supply management (e.g. source-to-tap approaches for municipal drinking water systems, protection of rural water supply wells against contamination, maintenance and renewal of municipal water-related infrastructure) and demand management (e.g. water metering, technical measures, use of economic instruments, appropriate pricing levels and structures); • speed up the access to water supply and sanitation infrastructure for all Canadians; • review systematically subsidies for water supply and treatment infrastructure and water pricing practices, aiming at cost-effectiveness and long-term financing in the maintenance and upgrading of facilities; review subsidies for flood and drought control projects in terms of their long-term impact on risk; progressively move to full-cost pricing while taking account of social factors and the needs of First Nation and Inuit communities; • continue to promote reduction of water use and releases of water effluents from large as well as small and medium enterprises; • ensure that the environmental intentions of the Agricultural Policy Framework are firmly translated into actions and environmental results (e.g. with respect to nutrients, pesticides, irrigation); • improve the information and knowledge base for water management, including i) harmonised and up-to-date monitoring of ambient water quality; ii) better data on expenditure, prices and financing; and iii) further analysis of microeconomic conditions facing key water users.
Nature and biodiversity Canada was early in ratifying the UN Convention on Biological Diversity (1992) and releasing a Canadian Biodiversity Strategy (1995). Two national action plans have been prepared for the agriculture and forestry sectors (although without clear environmental targets or time frames). The 2003 Species at Risk Act will help strengthen efforts towards protection and recovery
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of species at risk and theircritical habitats. Ecosystem protection has progressed, with a 40% increase in total area under protection over the decade. Canada plans to establish ten new national parks, thereby covering 34 of 39 natural regions. Co-operation with Aboriginal people has been strengthened with respect to protection of wildlife habitats and forest management. Canada’s wooded area (over 10% of the world’s forests) has remained constant and provides habitat for two-thirds of the country’s wildlife. Populations of most monitored forest bird species have remained stable or increased. The share of forest area under strict protection has increased (to 7%). Co-ordination of forest management is enhanced by the Canadian Council of Forest Ministers, which has developed criteria and indicators of sustainable forest management, and by the Canada Forest Accord, which contributes to implementation of the National Forest Strategy (released in 2003). Forest certification is increasing rapidly. It now covers one-quarter of working forests. CITES enforcement has been strengthened in recent years, but fines remain low. However, the total number of registered species at risk is increasing (partly due to increased assessment work) and the status of most of the assessed species at risk is unchanged or has deteriorated. The number of invasive alien species continues to grow; major pathways for aquatic invaders are not regulated or monitored. While 20% of the world’s remaining natural areas are in Canada, the share of total national area protected is less than the OECD average, and less than the 12% target. This partly reflects the need to respond to Aboriginal land claims and private rights to exploit natural resources. Much of the protected area is in the North (where human impacts on biodiversity have been less evident); in southern Canada protected areas are often small in size. Wildlife and bird protection areas provide only limited geographic coverage, and this protection is often not stringent. With the world’s longest coastline, Canada has only three small national marine conservation areas and no marine protected areas (despite 1997 legal provisions). It has one-quarter of the world’s wetlands, but only 9% are protected. Clear-cutting is still by far the most common forest harvesting practice: the poor design of past clear-cuts has been addressed, but compliance with provincialcodes of practice remains largely voluntary. Forest harvest levels have steadily increased over the decade; harvest of industrial roundwood is getting very close to annual allowable cut, especially for softwood. There is considerable debate regarding the factors that contribute to this increase, including market conditions, stumpage fees and the forest management regime.
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Recommendations: • complete the national park system; expand protected areas in the southern part of the country (where habitats are under much pressure); implement the new legal and institutional setting to improve management of national parks; • substantially increase the total area of marine and wetland ecosystems under protection; • implement the new legislation for the protection and recovery of species at risk, with particular emphasis on priority species; • take the necessary regulatory and financial steps to control the introduction and spread of invasive alien species; • expand the use of economic instruments to internalise in a transparent way the positive ecological functions of forests and prevent unsustainable use of softwood resources.
2.
Towards Sustainable Development Integration of environmental concerns in economic decisions
Canada has continued to make progress in decoupling environmental pressures from economic growth, achieving reductions in SOx and NOx emissions and in water abstractions. Establishment of a Commissioner of the Environment and Sustainable Development has played an important role in the auditing of federal sustainable development policies and the implementation of other environmental commitments by the federal government. The experience of this model institution could be usefully reviewed by other countries. The development and adoption of sustainable development strategies by all federal departments and various agencies has led to greater co-operation and promoted a culture of horizontality among departments and agencies. Development of strategic environmental assessment has proven useful for integrating environmental concerns into trade policies. There has been a positive trend with respect to reduction of environmentally harmful direct subsidies in several sectors (e.g. agriculture, fisheries, coal) but not in others (e.g. mining and some fossil fuel sectors). Measures have been put in place to provide more consistent tax treatment across non-renewable energy projects and among the non-renewable and other economic sectors are welcome.
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However, in most cases sustainable development strategies developed by various federal departments or agencies consist in repackaging current and planned activities and have little bearing on budget allocation. Fiscal instruments are generally used as fiscal deductions rather than to internalise externalities, thereby impeding economic efficiency. Market based instruments are insufficiently used to foster integration of environmental concerns into sectoral policies; too much emphasis is given to soft instruments like voluntary guidelines or partnerships. While cost-benefit analysis is becoming more common in policy discussions, it has rarely been a basis for policy decisions. Implementation of eco-efficiency is also constrained by inappropriate market signals; to provide incentives for eco-efficient projects, instruments such as energy taxes and water charges are required. Despite progress at the federal level in developing a data base related to the environment/ economic interface (e.g. with data on pollution abatement and control expenditure), this work is often outdated. Further efforts are needed to decouple nitrogenous fertiliser use and municipal waste generation from economic growth.
Recommendations: • prepare an integrated federal sustainable development strategy (including greening of the federal budget); develop and/or implement provincial sustainable development strategies; • continue to phase out environmentally harmful subsidies at both federal and provincial levels, including subsidies in the form of tax incentives for the resource-based economic sectors; • review existing environmentally related taxes (e.g. taxes on transport and on energy products) with a view to restructuring them in a more environmentally effective way, within a neutral fiscal context, at both federal and provincial levels; • continue to develop and expand the use of strategic environmental assessment; • continue and strengthen efforts to implement co-ordinated inter-jurisdictional decision-making that integrates environmental, social and economic policies.
Integration of environmental and social concerns Scientific and economic research on pollution and its health impacts has progressed, contributing significantly to advances related to control of POPs
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by Canadian and international policy makers. There has been continuing development of Canada-wide standards for key pollutants posing health risks (e.g. benzene, mercury, PM and ozone). The environmental industry has grown, generating jobs for qualified environmental professionals; active environmental employment programmes have produced results, including development of environmental expertise in Aboriginal communities. Concerning environmental public consultations, creation of the Commissioner of the Environment and Sustainable Development in 1995 further contributed to responding to citizens’ environmental queries and requests for investigations using the environmental petition process. The National Pollutant Release Inventory has been improved in terms of coverage and public access. The emergency management system works well with respect to preparation for and response to a range of natural disasters and environmental emergencies (including the 2003 regulations on the latter, requiring commercial and industrial facilities that handle toxic substances to develop an environmental emergency plan). However, parts of Canada continue to experience insufficient air and water quality, leading to significant health costs. There are considerable disparities in access to safe water supply, including poor water services for Aboriginal people. A number of unsettled land claims have led to uncertainty about land and resource rights, hindering investment in resource industries. Areas of the North continue to be exposed to levels of contaminants and potential climate change effects that threaten human health and ecosystems. In particular, the mining industry needs to further improve its environmental and social performance in order to make a sustainable contribution to local economic development. Some environmental information is outdated and is not harmonised across federal government departments. Publication of integrated national state of the environment reports ceased in 1996 as a result of budget cuts. While there are some reports (forest, climate change, GEO), further information efforts are needed in the areas of environmental indicators, economic information on the environment, and sustainable development in practice (e.g. environmentally harmful subsidies, cost-effective natural disaster mitigation measures). Canada has signed but not ratified the 1992 Helsinki Convention on transboundary effects of industrial accidents; it has not signed the 1998 Aarhus Convention on access to environmental information and public participation in environmental decision making.
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Recommendations: • continue to advance scientific and economic analysis relating to environmental health; focus action on pollution affecting human health, including that of vulnerable segments of the population; • make further progress on unsettled land claims in order to remove uncertainties about land and resource rights and foster economic development in Aboriginal communities; continue devolution of land and resource management to the northern territorial governments and Aboriginal self-governing communities; • implement policies to foster economic and social development of the North while protecting its natural environment and Aboriginal cultural values; facilitate diversification of economic activities in the North while pursuing implementation of environmentally sustainable mining; • continue efforts to develop and strengthen high-quality and integrated environmental information and data and implement the Canadian Information System for the Environment; report periodically on the state of the environment; further develop new natural and human capital indicators.
Sectoral integration: chemicals The Canadian government has acted to respond to a number of weaknesses high-lighted by the report of the Commissioner of the Environment and Sustainable Development to the House of Commons on toxic substances (1999, revisited 2002). To implement the new Environmental Protection Act (CEPA 1999), the government has developed a very comprehensive approach to the examination and management of existing substances in commerce. Particular attention is being given to persistent, bioaccumulative and toxic substances, which can affect future generations. By September 2006 approximately 23 000 substances should have undergone the first examination phase and be categorised. The new Pest Control Act, addressing registration of pesticides, is planned to come into force in 2004. The National Pollutant Release Inventory has advanced significantly. Canada is very active in regional (North America, the Arctic) and international fora concerned with chemicals. It participates actively in the OECD programme on chemicals. A policy framework has been developed to make environmental performance agreements effective and credible. Progress and vigilance are still needed in some areas. Chemicals of major concern are not monitored in the environment on a regular basis. Environment Canada and Health Canada cannot require data on existing substances from the chemical
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industry for their categorisation; there is no time frame for the second phase of identification (i.e. screening-level risk assessment). Even if screening-level risk assessment is less onerous than in-depth risk assessment, adequate resources will be required to reach the ultimate objective of this very ambitious initiative: risk management of all substances of concern (i.e. toxic substances under CEPA). The extent of industry participation in future work has not been clarified. Risks associated with chemicals of concern are often managed using many voluntary instruments without legal backup; only the greatest risks are managed under CEPA. In the short term, sufficient resources have been allocated to implement new legislation on pesticides; in the long term, resources must be secured to ensure continuous implementation. Currently the industry is not charged at the level of the total cost of evaluations, and there is no tax on pesticides. Individual licensing of thousands of emission sources (e.g. in Ontario) does not take into account the cumulative effects of exposure to several sources. There is no classification and labelling requirement for chemicals dangerous to the environment. Duplication of reporting requirements may result from the lack of co-ordination between the federal and provincial/territorial governments.
Recommendations: • continue to improve monitoring of toxics in the environment; • ensure that adequate resources are allocated for the examination and management of existing substances in commerce; continue to ensure that there are adequate resources to implement the new law on pesticides registration; consider a tax on pesticides; • manage the assessment phase of the review of existing substances of concern in keeping with global timeframes; increase participation by the chemical industry in the gathering of information relevant to hazard assessment of chemicals; further strengthen co-operation on (and harmonisation of) chemicals risk management through the Canadian Council of Ministers of the Environment; avoid duplication of chemical industry reporting requirements; • move towards a classification system for the environment through implementing the global harmonisation system for classification and labelling of chemicals; • use an appropriate mix of regulatory and non-regulatory instruments to better control chemicals (e.g. regulations, rather than voluntary measures, to address organic or inorganic chemicals of high concern with respect to human health or the environment; voluntary measures, backed up by legal measures, for risk reduction); • ensure full implementation of the OECD Council Acts related to Good Laboratory Practice for new tests (e.g. with respect to new and existing chemicals, including pharmaceuticals).
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OECD Environmental Performance Reviews: Canada
International Commitments
Canada has an impressive record regarding international environmental co-operation. It continues to support and pursue a range of agreements, meeting its commitments and obligations. It is an active and responsible party to a wide array of bilateral, regional and multilateral treaties and agreements. Canada provides environmental leadership in many international bodies (e.g. UNEP, WMO, WTO, FAO, UN-ECE, the OECD and the UN Commission on Sustainable Development) and is closely identified with important international initiatives promoting sound environmental management (e.g. actions related to the ozone layer, climate change, POPs) and sustainable development. This is reflected, for instance, in improved air and watershed conditions in Canadian boundary areas and beyond. At regional level, Canada-US environmental co-operation has been close and generally effective; the International Joint Commission (IJC) is active and is influential on a variety of issues. The fisheries dispute with the US over protection of Pacific salmon has been resolved; long-standing disputes over acid rain have given way to co-operative risk reduction efforts. Growing co-operation with Mexico and the US within the North American Commission on Environmental Co-operation has facilitated a hemisphere scale approach to shared air pollution and wildlife management challenges. The eight-nation Arctic Council provides a factual basis and opportunities to overcome a previously piecemeal approach to environmental management in that sensitive region. However, Canada’s capacity to translate international commitments into action and results can pose challenges because of its special federal-provincial governmental relationships (implementation is often a shared federal-provincial or a provincial responsibility) and by budget cuts. In particular, between 1995 and 1999, such cuts adversely affected staffing levels and programme funding for meeting international obligations (e.g. enforcement of laws and regulations) at all levels of government. A number of international agreements should be reviewed for signature and/or ratification (e.g. marine agreements, the Aarhus Convention). Canada (like a number of other OECD countries) failed to meet a year-2000 commitment to stabilise greenhouse gas emissions. It accepted and is now pursuing a challenging new Kyoto target. Marine pollution and resources issues still need to be addressed. Some commercial fisheries have been closed as a result of over-fishing and environmental changes. Loss of fish and wildlife habitat in riparian and coastal areas due to urban expansion is a growing problem. Water quality in the Great Lakes continues to be degraded by PCBs, mercury and other toxic substances released from contaminated sediments and from long-distance atmospheric transport, raising concerns about bioaccumulation
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in fish and drinking water quality in certain areas. Total ODA declined significantly before a recent commitment and subsequent reversal of this trend. In addition to promising Canadian leadership in environmentally related ODA activities, adequate funding will be required to support follow-up and delivery on national commitments.
Recommendations: • further elaborate and aggressively implement the Climate Change Plan for Canada, using a broad array of policy instruments (including emissions trading and other flexibility mechanisms) to ensure that GHG targets are met effectively and efficiently; continue to analyse the costs and benefits of various GHG control measures, including the cost of no action as well as ancillary benefits of taking action; expand co-operation internationally regarding common approaches to greenhouse gas reduction; • continue phasing out remaining inventories of ozone-depleting substances in Canada, and continue efforts to strengthen international compliance with the Montreal Protocol and its amendments, particularly in order to ensure coverage of new ODS and to assist developing countries to comply; • continue to strengthen surveillance and enforcement capabilities, at both federal and provincial levels, with additional staff and expanded investment in technology, to address marine problems (e.g. fishing violations, marine oil spills) and illegal trade (e.g. in endangered species, ozone-depleting substances and hazardous waste); • continue progress in improving water quality in the Great Lakes and other transboundary waters through co-operation with border country states (e.g. remediation of contaminated sediments, control of invasions by alien species); expand cross-border water ecosystem management (e.g. by promoting integrated, ecosystem approaches to transboundary water issues); • employ, strategically and rigorously, the range of tools available to the government to promote improved environmental management in developing countries (e.g. expansion of ODA, CIDA’s new policy directions, Canada’s membership on the boards of international development banks, the Canadian Export Development Corporation’s environmental review requirements); • review Canada’s record in ratifying and implementing international agreements (see References II.A and II.B).
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2
AIR MANAGEMENT*
Features • • • •
Effects of acid rain in eastern Canada Smog in urban areas Energy intensity and liberalisation of the electricity market Curbing pollution from road transport
* The present chapter reviews progress in the last ten years, and particularly since the previous OECD Environmental Performance Review of 1995. It also reviews progress with respect to the objective “maintaining the integrity of ecosystems” of the 2001 OECD Environmental Strategy. It takes into account the latest IEA Energy Policy Review of Canada.
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Recommendations The following recommendations are part of the overall conclusions and recommendations of the environmental performance review of Canada: • further reduce SO2 and NOx emissions (in line with 2010 targets) using the most cost-effective available policy measures (e.g. emissions trading in polluted areas, air emission charges, binding air emission standards and voluntary approaches); set a reduction target for VOC emissions and ratify the Gothenburg Protocol to the Convention on Long-range Transboundary Air Pollution (LRTAP); • ensure proper implementation of Canada-wide Standards for ambient concentrations of PM2.5 and ground-level ozone by 2010; • improve the design of Ontario’s NO and SO2 emissions trading scheme, particularly by extending its source coverage and by fixing an overall emission cap; • reduce the energy intensity of the economy and increase the share of low-emission energy sources, particularly through further internalising environmental externalities in energy prices for industry and households; • expand use of economic instruments in the transport sector (e.g. tax breaks for individuals using public transport, incentives to promote shift from road to rail freight transport, incentives to purchase fuel-efficient vehicles, gasoline taxation).
Conclusions SO2 emissions have decreased significantly over the last ten years, largely as a result of provincial reduction targets implemented through regulations or voluntary approaches. Consequently, sulphate loads affecting eastern Canada have been reduced and lake sulphate levels have shown considerable improvement. Ambient levels of NOx, SOx, CO and total suspended particles have decreased in urban areas. Canada-wide standards have recently been endorsed for PM2.5 and ground-level ozone, as well as some toxic substances such as benzene, dioxins, furans and mercury, with targets to be achieved by 2010. Increasingly stringent emission standards for motor vehicles have been adopted; by 2010 national standards on NOx and VOCs will be aligned with US standards. Progress has been made in improving periodic vehicle emission inspections. New regulations will reduce the sulphur content of road fuel to 15 parts per million for diesel by 2006, and to an average of 30 ppm for gasoline by 2005 (from the current levels of 500 ppm and 150 ppm, respectively). Most direct subsidies to the fossil fuel supply industries have been reduced if not eliminated in recent years. Concerning energy efficiency, voluntary sector-specific targets have been defined and continuously evaluated; comprehensive regulation has been issued
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for energy efficient appliances and buildings, as well as standards and guidelines for energy efficient technology. Significant federal investment has been committed for energy efficient infrastructure, including through Green Municipal Funds. The share of renewable energy (including large hydro)in total energy supply has remained relatively high (16%). A target has been established requiring that 10% of new electricity generating capacity come from emerging renewable sources such as wind, solar, biomass and small hydro. Production incentives (for wind energy), purchase refunds and fiscal concessions have been granted to develop the use of renewable energy sources. An emissions trading scheme for SO2 and NO was recently launched, targeting large emitters in Ontario’s electricity sector; the design of this scheme could be improved. However, emissions of traditional air pollutants in Canada remain very high compared with most OECD countries. While new initiatives were signed recently aimed at further progress in air management, the 1991 Geneva (VOCs) and 1999 Gothenburg (acidification, ground-level ozone) Protocols to LRTAP have not yet been ratified. NOx and VOC emissions have increased since the early 1980s, partly reflecting sustained growth in vehicle use. Lake sensitivity to acid rain is greater than initially thought; a further 75% reduction in SO2 emissions, beyond current commitments, may be needed in some regions. Although levels of primary airborne pollutants have decreased, many parts of Canada (both urban and rural) continue to experience unacceptable air quality, including for fine particles and ground-level ozone (there are high levels in the Windsor-Quebec City corridor). Canada is still characterised by high energy intensity. Ongoing market liberalisation of the energy sector could depress electricity prices. Road fuel prices have been virtually unchanged in the last ten years. They are still much lower than the OECD average, though higher than prices in the US. The use of economic instruments could be expanded. The instruments used either have little incentive effect (e.g. motor vehicle tax rebate) or primarily respond to objectives other than environmental ones (e.g. biodiesel tax rebate). The 2001-03 Sustainable Development Strategy of Transport Canada suggests moving towards “full cost pricing” with transport costs reflecting, to the extent possible, full economic, social and environmental costs. ♦
1.
♦ ♦
Policy Objectives
Acid deposition is a particular problem in eastern Canada, where most of the country’s acid rain occurs. Soils in this part of Canada generally have little ability to neutralise acid. The Canadian Acid Rain Programme, in which the federal govern-
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ment and the seven eastern provinces participate, was created in 1985 with the goal of reducing SO2 emissions to 50% below the 1980 level by 1994. It was hoped that wet deposition of sulphates in eastern Canada would thus be reduced to below 20 kg per hectare per year, which was considered the target load for protection of moderately sensitive ecosystems. Critical load levels have since been established, taking into account total (wet and dry) sulphate deposition and each area’s sensitivity. Further action on acid rain will require the co-operation of the United States (the source of about half the acid rain in eastern Canada). In 1991 Canada entered into the CanadaUS Air Quality Agreement, which reiterated the permanent national emissions limit of 3.2 million tonnes of SO2 per year (stipulated in the UN-ECE Protocol on the reduction of sulphur emissions) and a 10% reduction of projected NOx emissions, both to be attained by 2000. In 1998 federal, provincial and territorial energy and environment ministers signed the Canada-Wide Acid Rain Strategy for Post 2000, whose purpose was to establish new SO2 emission reduction targets for some provinces. Under this strategy Ontario, Quebec, New Brunswick and Nova Scotia committed to SO2 emission cuts 50% beyond already existing caps. Only Ontario has adopted an emission reduction target for NOx; several provinces are developing their own NOx targets. In many parts of Canada ground-level ozone, particles and other air pollutants combine to produce smog. The Federal 1990 Canadian NOx/VOCs Management Plan estimates the emission reductions (11% for NOx and 16% for VOCs, compared with 1985) necessary to meet the 82 ppb ozone concentration objective by 2005. A 25% reduction would need to apply to the Lower Fraser Valley, the Windsor-Québec City corridor and the southern Atlantic region. In 2000 Canada signed the Ozone Annex under the 1991 Canada-US Air Quality Agreement. Its purpose is to reduce cross-border transport of air pollutants: Canadian NOx emissions are to be reduced by 39% by 2007 and 44% by 2010 compared with 1990 levels, in line with the Canadawide Standards (CWS) process. In 2000 the Canadian Council of Ministers of the Environment (CCME), with the exception of Quebec, endorsed CWS for fine particulate matter (PM2.5), ground-level ozone and several toxic substances (e.g. benzene, dioxins, furans and mercury). The CWS establish targets for ambient concentrations (to be achieved by 2010) of 30 µg/m3 for PM2.5 (24-hour average) and 65 ppb for ozone (8-hour average). However, there are no penalties for non-compliance and no proposal has been made for designating attainment and non-attainment areas as is done in the US. Discussions on transboundary particulate matter have begun with the US. Particulate matter has been added to the national List of Toxic Substances; ozone precursors could also be included on that list. Canada is committed to emission reduction objectives for SOx, NOx, VOCs, heavy metals and POPs under the 1979 Geneva Convention on Long-range
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Transboundary Air Pollution (LRTAP). National and regional caps have been established for SO2 emissions. Targets for SOx, NOx and VOCs to 2010 would have to be set if Canada ratified the Gothenburg Protocol. Once the 2001 Stockholm Convention on POPs (which Canada has ratified) enters into force, further targets will be set for reduction or elimination of releases of these chemicals from production and use. The 1999 Canadian Environmental Protection Act acknowledged for the first time the need to virtually eliminate the most persistent toxic substances (Chapter 7). Air management performance can further be assessed against the recommendations of the 1995 OECD Environmental Performance Review of Canada: – continue to assess the need for further reductions in SOx emissions to ensure the long-term protection of eastern Canadian ecosystems and, if needed, consider new action; in this connection, translate national commitments concerning reduction of SOx emissions in eastern Canada into provincial commitments and implementation; – examine options to reduce the contribution of on-road and off-road vehicles to NOx and VOC emissions; – consider the scope for expanding the use of economic instruments in air management, such as taxes and charges in the road transport sector and tradable emission permits for SO2; – continue to pursue improved cost-effectiveness in air management through the use of voluntary agreements and steps towards integrated pollution prevention and control; – develop as part of the harmonisation programme a cross-jurisdictional set of performance criteria to assess the achievement of the objectives of air management programmes. Regarding the integration of environmental concerns in energy policy, the 1995 Environmental Performance Review recommended that Canada: – encourage greater energy conservation by additional policy measures, using a combination of voluntary, regulatory, economic and other instruments, particularly economic instruments such as taxes and charges, to achieve environmental goals at least cost; – price electricity to reflect marginal cost of supply, so as to provide more accurate economic signals to energy users than those given by current pricing methods and to help compensate for reductions in demand-side management programmes; – ensure that any financial assistance to energy activities does not undermine efforts to improve energy efficiency;
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– ensure that national energy and environmental objectives are translated into shared commitments between federal and provincial authorities; take steps to clearly allocate responsibilities and concrete actions.
2.
Performance in Meeting the Policy Objectives
SO2 emissions decreased significantly between 1990 and 2001; NOx and VOC emissions were moderately reduced (Figure 2.1). Per capita and per unit of GDP, emissions of traditional air pollutants (e.g. SOx, NOx and VOCs) in Canada are among the highest in any OECD country. Canada’s largest source of SO2 emissions is industry (nearly half of industrial emissions are from non-ferrous mining and smelting). Its largest source of NOx emissions is transport (Table 2.1). Canada has met only some of its domestic, bilateral and international commitments related to air pollution (Table 2.2). Between 1990 and 2001 (latest data available) Canada’s SO2 emissions decreased by 22%, primarily due to completion of the first phase of the acid rain programme begun in the mid-1980s. As a result of NOx and VOC emission reduction requirements for new motor vehicles, and actions to
Table 2.1
Atmospheric emissions by sourcea (1 000 tonnes) NO2
SO2 1990
2001
1990/2001 (% change)
1990
2001
VOCs 1990/2001 (% change)
1990
2001
1990/2001 (% change)
Stationary sources Power stations Industrial combustion Non-industrial combustion Industrial processes Otherb Mobile sources
3 116 2 374 695 646 336 224 52 31 1 989 1 465 44 8 93 114
–24 –7 –33 –41 –26 –83 22
923 1 084 262 311 369 561 70 77 191 112 31 23 2 058 1 708
17 19 52 10 –41 –26 –17
1 865 1 789 3 3 81 132 145 161 870 930 766 563 1 132 687
–4 –6 63 11 7 –27 –39
Total
3 209 2 488
–22
2 981 2 792
–6
2 997 2 476
–17
a) Rounded figures. b) Mainly agriculture and waste for SO2 and NO2; mainly solvents for VOCs. Source: Canada’s submission to UN-ECE.
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Figure 2.1 Air pollutant emissions SOx State, early 2000sa per unit of GDPb
Trends in Canada Index 1990 = 100
GDPb Fossil fuel supply
120
Canada
100 80
2.9
USA Japan France Germany Italy United Kingdom
SOx emissions
60 40
2.0 0.3 0.7 0.4 0.8 1.0 1.2 1.5
OECD Europe OECD
20 0
0.0
1990 1992 1994 1996 1998 2000
1.0
2.0
3.0
4.0
kg/USD 1 000
NOx State, early 2000sa per unit of GDPb
Trends in Canada Index 1990 = 100
GDPb Fossil fuel supply
120
Canada USA Japan France Germany Italy United Kingdom
100 NOx emissions
80 60 40
2.7 0.5 1.3 0.9 1.2 1.3
OECD Europe OECD
20 0
3.3
1990 1992 1994 1996 1998 2000
1.4 1.9 0.0
1.0
2.0
3.0
4.0
kg/USD 1 000
CO2
c
Trends in Canada
State, 2000 per unit of GDPb
Index 1990 = 100
GDPb Fossil fuel supply
120 100
CO2 emissions
80 60 40
0.62
USA Japan France Germany Italy United Kingdom
0.63 0.38 0.26 0.43 0.34 0.44 0.41 0.51
OECD Europe OECD
20 0
Canada
1990 1992 1994 1996 1998 2000
0.0
0.2
0.4
0.6
0.8
tonnes/USD 1 000
a) Or latest available year. b) GDP at 1995 prices and purchasing power parities. c) Emissions from energy use only; excludes international marine and aviation bunkers. Source: OECD; IEA; UNECE/EMEP.
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Table 2.2 Canada’s performance in meeting domestic and international air pollution commitments Commitment Air pollutant
Sulphur dioxide (SO2)
Nitrogen oxides (NOx)
Volatile organic compounds
(NMVOCs) Ammonia (NH3) Heavy metals Cadmium Lead Mercury
Results
Adoption
Target period
Target (%)
Emission ceiling (million tonnes)
Observed period
Observed changeb (%)
Helsinki Protocola Canada Acid Rain Programmec Canada-US Air Quality Agreement Oslo Protocola(national) Oslo Protocola (SOMAd) Canada-Wide Acid Rain Strategy Post 2000e Gothenburg Protocola
(1985)
1980-93
–30
3.2
1980-93
–45 (2.6)
(1985)
1980-94
–50
2.3
1980-94
–46 (2.5)
(1991) (1994) (1994)
1991-2000 1980-2000 1980-2000
.. –30 –46
3.2 3.2 1.75
1991-2000 1980-2000 1980-2000
–31 (2.5) –47 (2.5) –62 (1.2)
(1998) (1999)
2000-10f 1990-2010
–50 . .g
.. . .g
.. 1990-2001
.. –22 (2.5)
Sofia Protocola Canada-US Air Quality Agreement Canada NOx/VOCs Management Plan Gothenburg Protocola Ozone Annexh
(1988)
1987-94
1987-94
–0.4 (3.0)
(1991)
1991-2000
–10
(1990) (1999) (2000)
1985-2005 1990-2010 1990-2010
–11 . .g –44i
Geneva Protocola Canada NOx/VOCs Management Plan Gothenburg Protocola
(1991)
1988-99
–30
(1990) (1999)
1985-2005 1990-2010
–16 . .g
Gothenburg Protocola
(1999)
1990-2010
. .g
1990 cap 1990 cap 1990 cap 1990 cap 1990 cap 1990 cap
Domestic /bilateral/ multilateral
Aarhus Protocol
a
POPs Aarhus Protocola PAHs Dioxins/furans Hexachlorobenzene
0
1991-2000
–4 (2.8)
1985-2001 1990-2001 1990-2001
0 (2.8) –6 (2.8) –6 (2.8)
1988-99
–14 (2.5)
. .g
1985-2001 1990-2001
–20 (2.5) –17 (2.5)
. .g
..
..
0 0 0
.. .. ..
.. .. ..
0 0 0
.. .. ..
.. .. ..
. .g
(1998)
(1998)
a) Protocol to the 1979 Geneva Convention on Long-range Transboundary Air Pollution (LRTAP). Canada has signed but not ratified the Geneva and Gothenburg Protocols; all other protocols have been ratified. b) Emission levels (in million tonnes) at the end of observed period are in brackets. c) Applies to the seven eastern provinces. d) Sulphur Oxides Management Area (SOMA) in south-eastern Canada. e) Applies to New Brunswick, Nova Scotia, Ontario and Quebec. f) 2000-15 for Ontario. g) Canada is to submit an emission ceiling upon ratification. h) Annex to Canada-US Air Quality Agreement. i) An interim target is –39% by 2007. Source: Canada’s submission to UN-ECE.
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reduce releases from stationary sources, emissions of these pollutants declined in the period 1990-2001 (–6% for NOx and –17% for VOCs). Emission reductions were achieved despite sustained growth in economic activity and population, as well as in the size, numbers and use of vehicles. However, ratification of the Gothenburg Protocol would require setting a VOC target that would likely go well beyond what current domestic plans can deliver. In most parts of Canada, reducing NOx emission reductions is seen as a more efficient way to reduce ozone levels. National and regional caps have been set for SO2 emissions, consistent with the recommendation of the 1995 Environmental Performance Review to assess the need for further SOx reductions. By 2000 SO2 emissions were 20% below the committed national emission ceiling (in million tonnes) and approximately 30% below the cap for eastern Canada. These reductions were achieved through federal-provincial agreements that put provincial targets in place and implemented them using regulations or agreements reached with emitters. Although NOx emissions increased between 1980 and 1989, the introduction and use of cleaner vehicles have led to a 6% decrease since 1990. The area of eastern Canada that receives heavy loads of wet sulphate (20 kg or more per hectare per year) shrank considerably between 1980 and 2000; the pattern of wet nitrate deposition changed very little. Of 152 lakes monitored for the effects of acid rain in Ontario (mainly the Sudbury region), Quebec and the Atlantic region since the early 1980s, 41% have shown some improvement in acidity levels, 50% have shown no change and 9% are worse. Sulphate levels in lakes, which have shown much greater improvement than acidity levels, reflect SO2 emission reductions. However, there is a considerable time lag before emission reductions translate into widespread regional improvements in lake acidity or alkalinity. Lake sensitivity is greater than was earlier believed. Even when current Canadian and US control programmes have been fully implemented, an estimated 80 million hectares (extending from central Ontario through southern Quebec and across much of Atlantic Canada) will continue to receive ecosystem-damaging sulphate deposition. Scientists estimate that a further 75% reduction of SO2 emissions beyond current commitments will be necessary in targeted regions. SO2 deposition has been carefully studied, but NOx deposition is not yet well understood. If nitrate deposition continues at current levels, its contribution to acidification could eventually erode the benefits of SO2 emission reductions. Despite improvements in levels of primary airborne pollutants, many parts of Canada (both urban and rural) continue to have unacceptable air quality, especially in summer. At many locations ground-level ozone and particulate matter combine with other air pollutants to produce smog. Since 2000 the Toronto Smog Summit has attracted community, industry and government leaders from around the world, who
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explore smog solutions. Concentrations of particulate matter (PM2.5) measured at 12 urban sites in Canada decreased between 1985 and 1996. They have since remained relatively unchanged (composite annual mean) or have increased (second highest of 24-hour average). Available data show that many areas record daily PM2.5 levels high enough to produce adverse health effects. Ground-level ozone levels have not changed significantly across Canada; high levels are recorded mainly in the Windsor-Québec City corridor and, to a lesser extent, the southern Atlantic region and the Lower Fraser Valley of British Columbia. Ambient levels of several other important pollutants (NOx, SOx, CO, total suspended particles) have generally decreased or have remained low over the last 10 years in urban areas (Table 2.3).
Table 2.3
Trend in air quality in Canada, 1998
National Montreal Vancouver
Particulatesa
NO2
SO2 Metropolitan area
Lead
µg/m3
Trend 1990-98b
µg/m3
Trend 1990-98b
µg/m3
Trend 1990-98b
µg/m3
Trend 1990-98b
14.7 11.5 8.3
92 77 41
32.3 34.3 35.4
81 66 75
35.4 41.8 20.6
91 113 64
0.015 0.031 0.014
73 155 35
a) Particulates bigger than 75 µm. b) Index 1990 = 100. Source: OECD.
3.
Integration of Air Management in Transport Policies
Most air pollutant emissions from the transport sector derive from road transport (Box 2.1). With respect to the 1995 OECD recommendation to reduce road vehicles’ contribution to NOx and VOC emissions, in 2001 Canada published a 10-year Federal Agenda on Cleaner Vehicles, Engines and Fuels setting out a plan for the development of emission standards consistent with those of the US. In the last three decades the federal government has adopted increasingly stringent controls on motor vehicle emissions. Canada’s current vehicle emission standards, in effect as of the 1998 model year, are aligned with USEPA requirements. Between 2004 and 2010 more stringent national standards applying to light-duty vehicles and heavy trucks and buses will be phased in. The new standards (aligned with those of the US) will reduce allowable levels of
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Box 2.1 Main features of the transport sector Over 80% of Canadian passenger traffic (in passenger-kilometres) is road traffic. By contrast, 63% of freight traffic (in tonne-kilometres) travels by rail though the share sent by road is increasing (21% in 1990, 29% in 1999) (Figure 2.2). Road vehicle stock grew by 8% in the 1990s (private car ownership is currently around the OECD average, but considerably lower than in the US). Road traffic volume (in vehicle-kilometres) grew by 25%. Road transport still represents the largest share of energy consumption by the transport sector (75%). The average fuel efficiency of new vehicles (litres per 100 kilometres) has not improved since the early 1980s. Use of less fuel efficient light-duty trucks and sport utility vehicles has increased. Reliance on public transport for urban transit remains limited, at a steady 8% of total urban passenger–kilometres. Jurisdiction over transport is shared by the federal, provincial/territorial and municipal governments. Municipalities are responsible for local planning decisions, within the confines of provincial legislation (e.g. development of transport plans, public transit and parking fees). Major road construction, vehicle licensing and inspection, and enforcement of traffic rules (e.g. speed limits) fall under provincial/ territorial jurisdiction. International transport issues, standards (for vehicle emissions and fuel quality), and air and most marine transport are addressed at the federal level. The federal government is also responsible for national and inter-provincial/territorial aspects of rail, bus and truck transport.
emissions from new on-road vehicles by up to 95%. All cars and light-duty trucks will be subject to the same set of stringent emission standards. Pending implementation of these new regulations, Environment Canada and the automobile industry have signed a Memorandum of Understanding (MOU) providing that for the 2001-03 model years the same low-emission vehicles will be sold in Canada and the US. Regulations are being prepared to control emissions from off-road engines (e.g. in recreational vehicles, or engines used in agriculture and construction), as is already the case in the US. On-road vehicle emission standards for particulate matter are also made consistent with those of the US. New emission standards for SOx, NOx and ODS were issued in 2001, which should facilitate Canada’s accession to MARPOL Annex VI (Chapter 8). While no federal regulations govern locomotive emissions in Canada, a MOU between Environment Canada and the Rail Association of Canada limits total NOx emissions from locomotives to below 115 000 tonnes per year in the period 1990-2005. Periodic inspection of on-road vehicle emissions is facilitated by the Canadian Council of Ministers of the Environment codes of practice (updated in 1998 for light-
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Figure 2.2
Trends in the transport sector
Freight traffic,a 1990-2000
Passenger traffic,b 1990-2000
1990 = 100
1990 = 100
220
Road
220
200
200
180
180
160
160
140
Air Rail
120
Air
Buses and coaches
140 GDPc
GDPc
120 Domestic marine transport
100 80
Rail Private cars
100 80 0
0 1990
1992
1994
1996
1998
2000
1990
1992
1994
1998
2000
Total final energy consumption by the transport sector, 2001
Private car ownership, 1999
Pipeline 9% Canada
1996
46
Air 9%
Inland navigation 3%
Rail 4%
76
USA Japan
40 47
France Germany
52 56
Italy 41
United Kingdom OECD Europe
39 45
OECD 0
20
40
Road 75% 60
80
vehicles/100 persons
a) Index of relative change since 1990 based on values expressed in tonne-kilometres. b) Index of relative change since 1990 based on values expressed in passenger-kilometres. c) GDP expressed in 1995 prices and purchasing power parities. Source: ECMT; AAMA; IRF; OECD.
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duty vehicles, issued in 2002 for heavy-duty ones). Current federal regulations require new vehicles to be equipped with on-board diagnostic systems (to monitor emission control equipment) and systems to capture fuel vapour during refuelling. “Vehicle emission clinics” are organised across Canada every summer to educate the Canadian public on the importance of proper vehicle maintenance to reduce emissions. The federal Personal Vehicle Programme (previously called the Auto$mart) provides motorists with tips on buying, driving and maintaining vehicles so as to reduce fuel consumption. Concerning fuel quality, new regulations will reduce the sulphur content of on-road diesel to 15 ppm in mid-2006. This represents a 97% sulphur reduction compared with the current 500 ppm maximum; it will allow the introduction of advanced emission control systems for diesel vehicles, mainly trucks and buses. It is also intended to establish a sulphur limit for off-road diesel fuel. From 2005, low-sulphur gasoline (average sulphur level under 30 ppm) will be required in Canada. As an interim step, gasoline must meet an average sulphur level of not more than 150 ppm during the phase-in period of July 2002 to December 2004. The benzene level in gasoline must not exceed 1% by volume. To reduce emissions of benzene and other VOCs during refuelling of road vehicles, the flow rate of nozzles used to dispense gasoline has been limited to a maximum 38 litres per minute since 2001. Since December 1990, limits of 5 mg/l lead and 1.3 mg/l phosphorous apply to unleaded gasoline. Leaded fuels may only be used in aircraft, farm machinery, boats and large trucks. Current IMO proposals limit the sulphur content of marine fuels to 4.5%. Only a small amount of the marine fuel currently used is above that level. IMO could create Special Areas where sulphur levels are restricted to 1.5% (e.g. in the Greater Vancouver Regional District). Road fuel prices have been virtually unchanged during the last ten years (gasoline) or have increased only slightly (diesel). In terms of purchasing power parities, they are much lower than those in Europe (Figure 5.3). Expressed at current exchange rates, both diesel and gasoline prices are 20% higher than those in the US (they were 30% higher in the mid-1990s) and are 15% and 5% lower, respectively, than the OECD average (compared with 30% and 10% in the mid-1990s) (Figure 2.3). Concerning the 1995 OECD recommendation to expand the use of economic instruments, Ontario has in place a system of motor vehicle tax incentives (i.e. tax rebates) for passenger vehicles with low fuel consumption. At the time of purchase, vehicles that consume less than 6.0 litres of fuel per 100 kilometres are eligible for a tax rebate of CAD 100, while for those consuming between 6.0 and 8.9 litres CAD 75 must be paid (CAD 250 for those consuming between 9.0 and 9.4 litres). It is doubtful that such low rates have a strong incentive effect on consumers. The
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Figure 2.3 Road fuel pricesa in Canada and the United States USD/litre
0.5 Unleaded regular-Canada Diesel fuel-Canada Unleaded regular-US
0.4
Diesel fuel-US 0.3
0 1992
1994
1996
1998
2000
a) In USD at current prices and exchange rates. Source: IEA-OECD.
Federal 1995 Climate Change Plan set the goal of increasing the market share of gasoline with 10% ethanol blend to 35%, and the amount of bio-diesel produced to 500 million litres a year (2.5% of current diesel consumption). The government recently proposed that the biomass-produced ethanol or methanol portion of blended diesel be exempt from the federal excise tax on diesel fuel, as is already the case (since 1992) for blended gasoline. Biomass-produced bio-diesel would also be exempted, along with the bio-diesel portion of blended diesel fuel. This measure appears to respond more to agricultural policy objectives than to environmental ones. In an effort to ease traffic congestion, a regional “smart-growth” advisory panel has recommended that individuals who use public transport receive a tax break. This benefit would take the form of tax-free employer-financed transit fares and passes, which are currently treated as taxable benefits. Transport Canada recently suggested that a new gasoline tax to pay for an expansion of public transportation should be considered. Federal funding is envisaged to revitalise Canada’s rail service.
4.
Integration of Air Management in Energy Policies
Canada is still characterised by high energy intensity (Box 2.2). While this can be attributed to the importance of energy-intensive industries and climatic conditions, it also reflects energy prices for Canadian industry, which have remained well below
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Box 2.2
45
Main features of the energy sector
The energy intensity (energy supply per unit of GDP) of Canada’s economy decreased in the 1990s, but has remained well above the OECD average (Figure 2.4). This is also the case for energy supply per capita (8.0 toe in 2001, compared with an OECD average of 4.7). The high level of energy use in Canada can be explained by vast travel distances, the cold climate, an energy-intensive industrial base, relatively low energy prices and a high standard of living. Indigenous energy production was 379 Mtoe in 2001 (second highest in the OECD area), an increase of 39% compared with 1990. In this period total primary energy supply (TPES) rose by 19%, to 248 Mtoe in 2001. Canada is a major producer of fossil fuels, which provide about 76% of its energy needs as well as substantial exports. The share of natural gas is growing (to 29%), that of oil is falling (to 35%) and that of coal remains stable (at 12%). Reliance on renewable energy sources is stable at 16% of TPES (11% hydro and 5% biomass); nuclear’s share has fallen from 9 to 8% of TPES. Final energy consumption is mainly shared by industry (35%), the residential and commercial sectors (31%) and transport (29%). Development of energy sources and other natural resources is mainly under provincial jurisdiction. Each province utilises its own resources according to its particular needs and situation. The provinces have, however, agreed to meet minimum environmental standards of operation, which are often negotiated with the federal government. This is the case for stationary fossil fuel burning equipment (boilers) and road fuel quality. The electricity sector has been organised as a set of monopolies, each operating within provincial borders; provinces generally own generation, transmission and distribution utilities and regulate their activities. In most provinces a single utility is dominant and there are no plans to reduce its market power, except in Ontario and (to a lesser extent) Alberta, where efforts are being made to develop competition, the largest utility being privately owned.
those in other OECD countries (Table 2.4). This is especially the case for electricity and natural gas prices and, to a lesser extent, oil prices. Energy prices for households are below those in many other OECD countries but are becoming closer, especially when compared using purchasing power parities. Hydro is the dominant source of electricity generation (59%), followed by coal (20%), nuclear (13%), gas (5%) and oil (3%). Since electricity in most provinces is regulated on a cost-of-service basis, prices reflect the costs of generation, transmission and distribution. In Alberta wholesale and retail prices are deregulated, so that the marginal costs of supplies are major components of end-use prices for most customers. Market liberalisation is pursued in some provinces, essentially to obtain better access to US markets. This could further
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Figure 2.4
Energy structure and intensity
Energya per unit of GDPb Trend in Canada, 1990-2001
State, 2001
1990 = 100
Canada
0.29
100 USA
0.25
Japan 75
France
0.19
Germany
0.18
Italy United Kingdom
0.13 0.18
OECD Europe
0.18
50
25
0.16
OECD 0 1990
1992
1994
1996
1998
Energy supply by source,c 1990-2001 Mtoe
0.00
2000
0.21 0.10
0.20 0.30 toe/USD 1 000
Total final energy consumption by sector, 2001
Hydro, geo, solar, wind, combustible renewables and waste
250
Non-energy Agriculture 2.1% use 3.3%
200
Nuclear
150
Natural gas
Residential/ commercial 30.9%
Industry 35.2%
100 Oil 50 Coal and coal products 0 1990
1992
1994
1996
1998
Transport 28.5%
2000 Total 185.0 Mtoe
a) Total primary energy supply. b) GDP at 1995 prices and purchasing power parities. c) Breakdown excludes electricity trade. Source: OECD; IEA.
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depress prices. The upstream gas market is fully liberalised; some provinces are now liberalising the downstream market. Most direct subsidisation of the fossil fuel supply industries (upstream oil, gas and coal) has been reduced (if not eliminated) in recent years. Direct financial support has fallen sharply since the mid-1990s, reflecting the decision to eliminate funding for petroleum megaprojects and, subsequently, to privatise coal-mining operations on Cape Breton Island (on Canada’s east coast). Mining on Cape Breton received federal assistance for several years (CAD 44 million in 1998 for producing 2.1 million tonnes). In mid-2001 dissolution of the federally owned Cape Breton Development Corporation (Devco) ended subsidisation of the Canadian coal industry. Subsidies for nuclear energy have declined substantially; they now largely support safe operation of existing CANDU reactors and research on reactor-based medical isotopes. Canadian experience with emissions trading began in Ontario with the introduction of the Pilot Emission Reduction Trading (PERT) Project in 1996. PERT was a voluntary industry-led, multi-stakeholder initiative. Its objective was to evaluate the feasibility of “open market” emissions trading as a mechanism to support
Table 2.4
Energy prices in Canada
(USD/unit converted using exchange rates) Electricity Industry (USD/kWh) 1994
Oil a
Households (USD/kWh)
2001
1994
Industry (USD/tonne)
2001
1994
Canada 0.038 . . 0.060 . . 106.6 OECD 0.073 0.047c 0.116 0.105c 119.7 Canadian price/ OECD (%) 52 .. 52 .. 89 Canadian price/ OECDd (%)
..
..
63
a) High-sulphur oil. b) Light fuel oil. c) 2000 data. d) Converted using purchasing power parities. Source: OECD; IEA.
© OECD 2004
..
..
2001
Natural gas b
Households Industry (USD/1 000 litres) (USD/107 kcal) 1994
2001
1994
2001
Households (USD/107 kcal) 1994
164.9 273.4 347.3 78.5 108.8 175.6 189 330.9 380.5 131.4 182.6 345.4
2001
294.1 386.4
87
82
91
60
60
51
76
..
105
103
..
..
59
91
48
OECD Environmental Performance Reviews: Canada
the reduction of GHGs, smog precursors and other air pollutants in the heavily industrialised corridor spanning Windsor, Ontario and Quebec City. P provided a skeleton of rules that evolved with experience. The project was transformed to Clean Air Canada Inc., which seeks to function as an advisory group to governments on SOx, NOx and GHG. In 2002 the Government of Ontario launched a NO and SO2 emissions trading scheme, the first regulated scheme in Canada, targeting large emitters in Ontario’s electricity sector. This scheme allows credits to be created outside Ontario, including in international jurisdictions, within 1 500 kilometres of the province for NO and 3 000 kilometres for SO2. Use of allowances from other Canadian and foreign environmental regulatory programmes is permitted. Emission caps apply only to electric utilities; uncapped sectors may sell credits based on emission reductions. It would be preferable for trading to be undertaken under an overall emission cap. Federal investment in energy efficient infrastructure (CAD 500 million so far) has been implemented through the Infrastructure Canada Programme (2000-06). Additional funding of CAD 2 billion for green infrastructure is expected from the recently created Canada Strategic Infrastructure Fund. An additional CAD 3 billion was announced in the 2003 federal budget. Green Municipal Funds were established in 2000 to stimulate investment in innovative environmental infrastructure and practices to obtain cleaner air, water and soil and protect the climate. A CAD 250 million federal endowment exists for these funds, supplemented by provincial contributions. For example, CAD 100 million has been made available in the form of no-interest loans in Alberta. Increasing awareness of the uptake of energy efficient practices largely relies on voluntary approaches. The Canadian Industry Programme for Energy Conservation is a longstanding voluntary scheme that defines sector-specific targets for energy efficiency. Use of such disaggregated sectoral energy efficiency indicators (and their continuous evaluation) is commendable. Awareness campaigns have been launched to make consumers and businesses more aware of energy-saving measures for buildings, automobiles, and heating and air conditioning. The federal government works with provincial and territorial governments to engage industries in a multi-pollutant emissions reduction initiative to address smog precursor (NOx, VOCs and PM) emissions. Comprehensive regulation of appliances and buildings is in place in the residential and (to a lesser extent) commercial sector. The Climate Change Plan proposes energy efficient retrofits of 20% of housing stock and 20% of commercial/institutional building stock by 2010. It also proposes building all new homes to R2000 standard by 2010 and all new commercial/ institutional buildings to a minimum 25% above the Model National Energy Code by 2010. Standards and guidelines
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for combustion turbines and for thermal electricity generation are output based; they recognise efficiency as a pollution prevention method. National SO2, NOx and PM emission standards have been developed for cement kilns (2000), boilers and heaters (2000) and thermal electricity generation (revised standards effective April 2003). There are no federal regulations for VOC emissions from stationary sources. National guidelines, codes of practice or standards were (and still are) being developed under the 1990 CCME NOx/VOC Management Plan. Measures have been taken to address releases of heavy metals and persistent organic pollutants to ambient air, as part of the federal and CCME Toxic Substances Management Policies (Chapter 7). Renewable energy represents a significant portion of Canada’s energy mix, largely due to large-scale hydroelectric projects. The Climate Change Plan sets a target of 10% of new electricity generating capacity from emerging renewable sources. Alberta has committed to a 5% share by 2005, mostly from wind and biomass. These alternative sources often compete poorly against non-renewable sources for investments. Incentives (involving federal transfers of CAD 260 million over 15 years)
Box 2.3 Fiscal incentives to encourage renewable energy development Canada is the world’s leading producer of electricity from large-scale hydropower. Biomass is another major source of renewable energy. The Canadian pulp and paper industry, the largest user of biomass energy, currently satisfies an impressive 54% of its energy needs (heat and electricity) with forest waste. Small amounts of wind energy, ethanol fuels, and geothermal and solar energy provide less than 1% of Canada’s current energy use. Wind energy is projected to expand (to 1 000 MW by 2012 in Quebec), as the government is committed to purchasing 13 million kWh of wind electricity in the next decade. A number of tax incentives have been introduced to encourage renewable energy development. Since 1996 pre-production costs of certain renewable energy and energy efficiency projects have been fully deductible by taxpayers (as in the case of non-renewable energy exploration expenses). The Government of Ontario recently introduced tax incentives to promote development of new electricity generation projects based on (clean) alternative and renewable sources. A comprehensive tax concession will apply to reliance on natural gas, hydroelectric, solar and wind power. Assets used to generate electricity from alternative sources are eligible for sales tax rebates and property tax concessions; the concessions apply to the corporate tax on revenue derived from electricity generated. Electricity produced from renewable sources benefits from corporate tax write-offs and capital tax exemption.
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have been introduced for electricity produced from wind energy. An initial payment of CAD 0.012 per kWh, gradually declining to CAD 0.008, is granted to eligible projects commissioned after 31 March 2002. It has been suggested that this wind energy production incentive be expanded to cover all forms of renewable energy. The Renewable Deployment Initiative (CAD 24 million over six years) to encourage use of active solar hot water, air heating systems and efficient biomass combustion began in 1998. Businesses are eligible for a 25 to 40% refund (to a maximum CAD 80 000) on purchases of qualifying systems. The federal government also funds some renewables research and development through its Renewable Energy Technologies Programme. This is carried out mostly through cost-sharing and technical assistance, at a level of CAD 8 million per year. Steps have been taken to improve the fiscal treatment of renewable energy (Box 2.3).
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3
51
WATER MANAGEMENT*
Features • • • • • •
Objectives: the provincial water strategies The Great Lakes The challenge of providing safe drinking water in urban and rural areas The need for full-cost pricing of water services Harmonising water management across multiple jurisdictions Sustainable development in the Fraser River Basin
* The present chapter reviews progress in the last ten years, and particularly since the previous OECD Environmental Performance Review of 1995. It also reviews progress with respect to the objective “maintaining the integrity of ecosystems” of the 2001 OECD Environmental Strategy.
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Recommendations The following recommendations are part of the overall conclusions and recommendations of the environmental performance review of Canada: • firmly implement water management policies, including provincial water strategies (e.g. basin management, ecosystem approach, stakeholder participation) and enforcement of regulations (e.g. inspections, sanctions); accelerate the development of integrated water resource management and water efficiency plans; • improve efficiency in the delivery of water and waste water services, through improved governance (e.g. consolidation of operators, quality assurance, accountability mechanisms), improved supply management (e.g. source-to-tap approaches for municipal drinking water systems, protection of rural water supply wells against contamination, maintenance and renewal of municipal water-related infrastructure) and demand management (e.g. water metering, technical measures, use of economic instruments, appropriate pricing levels and structures); • speed up the access to water supply and sanitation infrastructure for all Canadians; • review systematically subsidies for water supply and treatment infrastructure and water pricing practices, aiming at cost-effectiveness and long-term financing in the maintenance and upgrading of facilities; review subsidies for flood and drought control projects in terms of their long-term impact on risk; progressively move to full-cost pricing while taking account of social factors and the needs of First Nation and Inuit communities; • continue to promote reduction of water use and releases of water effluents from large as well as small and medium enterprises; • ensure that the environmental intentions of the Agricultural Policy Framework are firmly translated into actions and environmental results (e.g. with respect to nutrients, pesticides, irrigation); • improve the information and knowledge base for water management, including i) harmonised and up-to-date monitoring of ambient water quality; ii) better data on expenditure, prices and financing; and iii) further analysis of micro-economic conditions facing key water users.
Conclusions Canada has moved in recent years towards a more strategic approach to water resource management. Several provinces have modernised their water legislation, as well as adapting comprehensive water management strategies or plans for the first time. The river basin approach already applied in some major watersheds (e.g. the Great Lakes) is being extended to other catchments. Further progress was made during the review period in reducing water demand in the electricity and manufacturing
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sectors. Industrial pollution loads, including toxics in the Great Lakes, have also been reduced. While settlement patterns have ruled out substantial growth in municipal sewerage connection rates beyond the current three-quarters of the population, the proportion of sewered waste water that is untreated before discharge has fallen from 10.6% of the population in 1991 to 2.5%. The level of treatment has improved; the share of the total Canadianpopulation benefiting from secondary or tertiary treatment increased over ten years from 47.5 to 57.9%. A more rigorous approach is being taken to reducing the environmental impacts of agriculture on the water environment. However, slow progress with the clean-up of the Great Lakes demonstrates the difficulty of restoring impaired ecosystems. Following some decentralisation and delegation of water management responsibilities in some parts of the country, Canada experienced two major drinking water contamination incidents resulting in deaths. These incidents shook public confidence throughout Canada and jolted authorities into closely scrutinising drinking water management practices, including protection of source areas. Large increases in animal manure production, particularly from rapidly expanding piggeries in Quebec and Ontario, are of special concern in this regard. Moreover, poor inspection and maintenance of septic tanks serving over one-quarter of the population is a safety risk for the many wells that are the main source of individual water supply in rural areas. Residential water use per capita has increased. At the current rate of progress, it could take another 20 years or so for Canada to extend and upgrade its water infrastructure to the level required. Inadequate attention has been given so far to groundwater resources management. Despite the long-standing intention to increase efficiency of water and waste water services, and to implement the user and polluter pays principles, much remains to be done to achieve these objectives. For instance, user fees still cover only part of the cost of delivering water services, while fee structures generally do not encourage conservation. Subsidies and financial transfers are too often expected to take care of financial gaps. Provincial governments and municipalities should often take a more positive approach to full-cost water pricing, which might allow more rapid renewal of existing assets. Better harmonised and more up-to-date provincial/territorial monitoring data on the quality of Canada’s water resources, and water-related economic information, should support these efforts. ♦
1.
♦ ♦
Policy Objectives
Responsibility for water management in Canada is shared at federal, provincial/ territorial and municipal levels. Provinces/territories carry out all basic water management functions, including issuing enforcing permits to take water and to discharge
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effluents, in accordance with their water or pollution laws. Municipalities play a key role in implementing water objectives. All relevant agencies collectively pursue a host of water management objectives, mostly broad ones, with some specifying numerical targets and deadlines. Recently several provinces have, for the first time, adopted an overarching water strategy, vision or plan (Table 3.1 and Box 3.1). While each of these strategies responds to local needs, there are common themes: renewed emphasis on the user and polluter pays principles, a river basin approach, the sourceto-tap approach to provision of safe drinking water, and prevention of large-scale transfers of water beyond basin boundaries. This significant development reflects a combination of factors including some severe droughts in the 1990s, drinking water contamination at Walkerton and North Battleford (Box 3.2), climate change concerns, and growing acceptance in some provinces of sustainability as a model of economic development. All these factors have contributed to awareness that a limitless supply of clean water can no longer be taken for granted. Other objectives concern achieving common goals or some degree of harmonisation across the country. They are mainly pursued through the Canadian Council of Ministers of the Environment (CCME). For instance, the Canadian Environmental Quality Guidelines contain guideline values for drinking water, recreational water, water for aquatic life and irrigation, and livestock water. This document underpins provincial standards. Under the auspices of the CCME, federal, provincial and territorial health and environment departments have begun a major drive towards applying a comprehensive source-to-tap approach to protection of drinking water quality. In 2000 federal, provincial and territorial governments jointly adopted a National Programme of Action for the Protection of the Marine Environment from Land-based Activities (Chapter 8); better control of sewage discharges is one of its five national priorities. To promote a “level playing field” across the country and reduce overlap among jurisdictions, in 1998 the federal, provincial and territorial governments concluded the Canada-Wide Accord on Environmental Harmonisation; Quebec did not sign but supports the concept. All levels of government retained their existing authorities, but they agreed under the accord to work in a co-ordinated manner, particularly with respect to standards, enforcement and environmental assessment. As of June 2003, a set of standard regulations for discharges from sewage treatment plants was in preparation. The 1987 Federal Water Policy remains the overarching policy document at the federal level. It sets out five separate strategies (for water pricing, science leadership, integrated planning, legislation and public awareness) and contains 25 policy statements on various topics (e.g. management of toxic chemicals, preservation of wetlands, native water rights). The Constitution Act of 1867 grants the federal government exclusive jurisdiction over conservation and protection of oceans and their resources, sea coast and inland fisheries, boundary waters, federal lands, and
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Table 3.1
Selected recent water-related laws, strategies and plans
Legislation
Federal government
Alberta
British Columbia
Manitoba
Newfoundland and Labrador Nova Scotia
Source:
1992 Yukon Waters Act OECD.
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Strategies, plans and programmes
2002 amendment to International Boundary 2002 Oceans Strategy Waters Act 1999 Canadian Environmental Protection Act (Part 7, Division 2, Section 120-121) 1997 Oceans Act 2000 National Programme of Action for the Protection of the Marine Environment from Land-based Activities 1987 Federal Water Policy Five strategies (water pricing, science leadership, integrated planning, legislation, public awareness) 1970 Canada Water Act (R.S. 1985, c. C-11) 1994 National Action Plan to Encourage Municipal Water Use Efficiency 1996 Water Act 2003 Water for Life Strategy 2001 Municipal (Drinking Water) Policies and Procedures Manual 2002 Living Rivers Strategy 2002 Action Plan for Safe Drinking Water 1999 Freshwater Strategy 1997 Water Conservation Strategy 2002 Drinking Water Safety Act 2003 Manitoba Water Strategy 2000 Water Resources Conservation and Protection and Consequential Amendments Act 2002 Water Resources Act Multi-barrier Strategic Action Plan
2000 Water Resources Protection Act 1995 Environment Act Ontario 2002 Nutrient Management Act 2002 Safe Drinking Water Act 2002 Sustainable Water and Sewage Systems Act Quebec 1999 Water Conservation Law 1972 Environment Quality Act 1964 Watercourses Act Saskatchewan 2002 Water Regulations under the 2002 Environmental Management and Protection Act Northwest Territories 1992 Northwest Territories Waters Act Yukon
55
2002 Drinking Water Strategy
2002 Quebec Water Policy 2002 Mining and metal manufacturing 1993 Pulp and paper mills 1999 Water Management Framework
Framework for Management of Drinking Water Quality
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Box 3.1
A new Provincial Water Policy: Quebec
The 2002 Quebec Water Policy (“Water. Our Life Our Future”) is a good example of the water strategies adopted in recent years by provincial governments. This policy is based on extensive public consultation conducted by a specialist public agency, the Office for Public Enquiries on the Environment (BAPE), established under the Quebec Environment Quality Act 1978. The policy is framed around five main themes: reform of water governance; integrated management of the St. Lawrence River basin; protection of water quality and aquatic ecosystems; further progress in waste water treatment and improved management of water services; and promotion of water-based recreation and tourism. Under each of these headings the Quebec government has undertaken to carry out various actions, such as gradually implementing integrated watershed management (23 out of 33 projected watershed agencies had already been established by mid-2003). Concerning economic instruments, this policy commits the Quebec government to develop and gradually implement (beginning in 2003) a system of charges for the use, both water withdrawal and discharge of effluents, of the province’s water resources. It also introduces a concept of “ecoconditionality” which proposes to make financial support measures in agriculture conditional on farmers respecting environment-friendly farming practices (i.e. “cross-compliance”).
provision of safe drinking water and sewage treatment for Aboriginal peoples south of 60 degrees latitude. Canada’s Oceans Strategy was adopted in 2002 (Chapter 8). In the 2002 Speech from the Throne the federal government also committed itself to accelerate work with the provinces on improved national water quality guidelines, and to ensure their implementation in areas under federal jurisdiction. Water issues are an integral component of six large ecosystem initiatives covering some of the major Canadian ecosystems (Atlantic Coast, Georgia Basin, Great Lakes, Northern Ecosystems, St. Lawrence, Western Boreal). These have been jointly undertaken by Environment Canada and various provincial and territorial governments (Chapter 4). Concerning the recommendations of the 1995 OECD Environmental Performance Review of Canada, this chapter will show that i) in the latter part of the review period some significant initiatives were launched with respect to the recommendation on water and agriculture, but that ii) progress in relation to the three recommendations on water economics has been disappointing. This chapter will also show that there has been limited progress in regard to some of the criteria (e.g. freshwater quality, drinking water supply) of the 2001 OECD Environmental Strategy.
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Box 3.2 Dysfunctions in drinking water supply: Walkerton and North Battleford In recent years two serious drinking water incidents have served as urgent “wake-up calls” for water managers throughout Canada. The first, which occurred in May 2000 in Walkerton, Ontario, was caused by the contamination of a shallow well by manure spreading on overlying land. It resulted in seven deaths and over 2 300 cases of illness due to E. coli O157:H7 and Campylobacter jejuni. The second incident took place in April 2001 in North Battleford, Saskatchewan. Drinking water in North Battleford is drawn partly from the North Saskatchewan River, where there was a high incidence of the parasite Cryptosporidium parvum a short distance downstream from the outlet of its sewage treatment plant. Between 5 800 and 7 100 people were affected by an outbreak of gastroenteritis due to Cryptosporidium. The commissions of inquiry that examined the causes of the two incidents found multiple shortcomings all along the decision-making chain, from provincial governments to municipal governments to the operators of water services. It was considered by some that the transfer of responsibilities had not been accompanied by sufficient transfers of financial capacities and time to build institutional capacities. The recommendations of the commissions of inquiry have precipitated a number of measures aimed at improving quality assurance of drinking water services and tightening the accountability of the various actors responsible for drinking water safety. With the encouragement of the CCME, provinces and territories are adopting a source-to-tap approach to protect drinking water. This approach is aimed specifically at protecting drinking water source areas, optimising purification plant processes for sedimentation and filtration of particulate matter, and finally disinfection. Provinces have already reviewed or enacted new drinking water laws (e.g. Manitoba, Ontario) or regulations (e.g. Quebec, Ontario, Saskatchewan), adopted drinking water strategies (e.g. Nova Scotia) or action plans (e.g. British Columbia), issued new procedures (e.g. Alberta), strengthened operator training and employed more inspectors (e.g. Ontario). Thus, these intentions are being translated into actions and are beginning to provide actual results.
2.
Ambient Water Quality 2.1
Water quality in rivers
Overall, while river water quality is excellent in much of Canada (often because there is little human pressure to cause serious impairment), water bodies and ecosystems in more densely settled areas are negatively affected, as in most
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other countries. Canada does not operate a national water quality monitoring programme, and provincial or sectoral monitoring programmes do not use common standards to measure quality. Therefore, it has long been difficult to make an aggregated assessment of water quality across the whole country. The first such national assessment was published in 2003, based on a methodology adopted by the CCME in 2001; 51% of stations showed good to excellent performance in attaining local water quality objectives for the protection of aquatic life, 28% fair performance and 21% marginal or poor performance (Table 3.2). The 319 measuring stations included in the survey tend to be concentrated in populated areas. The effects of development on water quality in rivers can be relatively moderate (e.g. Edmonton on the North Saskatchewan River) or more serious (e.g. some rivers in Quebec, where agriculture has a large impact). If the recommendations of a special task force that reported in 2001 are implemented, more countrywide information should become available.
Table 3.2 Water quality index by water quality category, 1997-2001a Quality
Number of water quality sampling stations
Excellent Good Fair Marginal Poor Total
57 104 90 38 30 319
(%)
18 33 28 12 9 100
a) Four-year average. Source: National Round Table on the Environment and the Economy, 2003. Calculated by Environment Canada and the CCME Water Quality Task Group.
2.2
The Great Lakes
Shared responsibility, with the United States, for the Great Lakes and other boundary waters is a basic element of Canadian water management. The goal of the Great Lakes Water Quality Agreement (first adopted in 1972, amended in 1978 and 1987) is to restore and maintain the chemical, physical and biological integrity of the waters of the Great Lakes basin ecosystem; it also sets maximum permissible concentrations for a wide range of pollutants. Other Canada-US agreements exist for other boundary waters. At the national level, the five succes-
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sive Canada-Ontario Agreements respecting the Great Lakes Basin Ecosystem helped strengthen implementation of Canada’s commitments (Chapter 8). There are also agreements and various partnerships between states and provinces. In 2001 an Annex was added to the 1985 Great Lakes Charter, a good-faith agreement between the ten Great Lakes and St. Lawrence River jurisdictions in Ontario and Quebec. Annex 2001 seeks to facilitate decision-making with regard to water withdrawal in the Great Lakes Basin (including tributaries and groundwater). Quebec and Ontario are also associate members of the Great Lakes Commission, an agency that promotes the integrated development, use and conservation of water and related natural resources in the Great Lakes basin and St. Lawrence River. Heavy spending over 30 years on clean-up efforts has led to important progress: physical pollution (mainly in the form of “objectionable” and “nuisance” materials forming scums, sludges and odours) has almost been eliminated; algal growth has been slowed and water clarity in Lakes Erie and Ontario has improved. Levels of several contaminants including PCBs, DDT and mercury have declined in fish and wildlife by as much as 90% (Table 3.3) (Chapter 8). Nevertheless, many problems remain (e.g. toxic chemicals in contaminated sediments, invasive alien species). The 2002 biennial report of the International Joint Commission states that drinking water from the Great Lakes must still be treated, and that the public cannot always swim safely at all Great Lakes beaches or safely eat many of the Great Lakes fish. Of a list of 42 “areas of concern” originally identified (17 in Canada), only two (Collingwood and Severn Sound) have so far been removed (Chapter 8).
Table 3.3
Canadian releases of persistent toxic substances in Great Lakes basin (% reductiona)
Mercury PCBs Dioxins and furans Hexachlorobenzene Benzo(a)pyrene
2002 achievement
Canadian 2006 target
78 84 79 65 48
90 90 90 .. ..
a) Since late 1980s/early 1990s. Source: Annual progress report 2002, Great Lakes Binational Toxics Strategy.
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Canada is making good progress towards meeting the 2006 reduction targets set for emissions of persistent toxic substances to water and air under the Great Lakes Binational Toxics Strategy (Table 3.3). Reductions by Canada were of the same order as those achieved in the United States.
2.3
Groundwater quality
No countrywide overview of groundwater quality is currently available. Regional monitoring data suggest that greater emphasis should be given to groundwater issues. Pathogens are by far the most common well water contaminants in Canada. Depending on the region, 20 to 40% of surveyed rural wells have occurrences of coliform bacteria in excess of drinking water guidelines (0 E. coli and fewer than 5-10 total coliform per 100 ml). These figures may reflect contamination of surrounding groundwater or of the wells themselves. About 15% of rural wells exceed nitrates guidelines (45 mg/litre). Pesticides exceed acceptable concentrations in only 0.1% of rural wells. Industrial chemicals such as trichloroethylene have been identified in about 10% of municipal groundwater supplies, but nearly always below concentrations permitted in drinking water guidelines. Naturally occurring trace minerals (e.g. arsenic, fluoride) are also of concern. They are likely to become more so, as wells are dug more deeply to bypass contaminated shallow groundwater.
2.4
Coastal water quality
Contamination of coastal waters by untreated sewage undermines the full potential of the shellfish industry in British Columbia, Quebec and the Atlantic provinces. About one-quarter of the almost 20 000 km2 monitored in 2002-03 under the Shellfish Water Quality Protection Programme was classified as closed, mostly due to bacterial contamination.
3.
Water Use and Drinking Water Supply 3.1
Water use
Even in a country as water-rich as Canada (which uses just 1.6% of its total renewable water), it is desirable to avoid wanton water use, which puts needless pressure on ecosystems and increases the capital and operating cost of infrastructure. Through the efforts of Canadian industry, abstractions from natural waters have remained stable while overall gross water use has increased significantly. Per capita water abstraction in Canada (1 420 cubic metres per year) remains the second highest
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Figure 3.1 Water use, early 2000a Intensity of freshwater use
Abstraction per capita 1 420
Canada
1 790
USA Japan France Germany Italy United Kingdomb, c
680 530 460 980 340 560
OECD Europe OECD
1 000
19.0 20.3 16.2 20.2
USA Japan France Germany Italy United Kingdomc
32.1 20.7 14.2 11.4
OECD Europe OECD
910 0
1.5
Canada
2 000 m3/capita
0
10
20
30 40 abstraction as % of available resources
a) Or latest available year. b) Including marine waters for comparability purposes. c) England and Wales only. Source: OECD.
in the world (exceeded only by that of the United States); it is two or three times greater than that of most OECD countries (Figure 3.1). The electric power sector accounts for the lion’s share of water abstraction (about 64% of the total). Although gross water use by this sector has increased, it has managed to cap abstractions from natural waters by increasing recirculation of cooling water. The manufacturing sector (about 14% of abstractions) has continued its previous trend of reducing abstractions through a combination of increased recirculation and reduced gross water use. Examples are the paper and allied products sector and the metal and chemical sectors. Tightening of effluent quality requirements makes closed-loop processes a more viable option and often drives reductions in industrial water use. However, experts agree that there is considerable scope for further progress towards water recycling and greater re-use in many industries. Abstractions in the primary resource sector (about 11% of total withdrawals) have continued to increase. Unlike other sectors, agriculture consumes most of the water it withdraws; its high consumption rate is becoming an issue in the dry prairie provinces (Box 3.3). Abstractions by the mining and other primary resource industries are rapidly increasing, although from a comparatively small base.
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Box 3.3 Water resource management in Alberta Increasing pressures due to population growth, recurring drought in southern Alberta, and agricultural and industrial development prompted the provincial government to develop a comprehensive water management strategy. This Water for Life strategy, released in November 2003, identifies short-, medium- and long-term plans to manage the quantity and quality of Alberta’s water supply (its municipalities use 5% of the province’s water and irrigation 71%). Water for Life supports a watershed approach to water management and planning, led by watershed planning and Advisory Councils. This is consistent with the current development of a water management plan in the South Saskatchewan River Basin (SSRB) to allocate water in a sustainable and environmentally responsible way. While existing water allocation licences will be kept, the plan will address the availability of water for future allocations and river flows for the aquatic environment. The plan is being completed using a phased approach involving consultation with the four SSRB sub-basin advisory committees and the general public. Phase one of the plan, approved in June 2002, authorises water allocation transfers within the SSRB, subject to Alberta Environment approval and conditions. Water conservation holdbacks have also been authorised. The key goal of the second phase, scheduled for completion in mid-2004, is to find a balance between water consumption and environmental protection in the SSRB. This will include defining water conservation objectives (i.e. river flow rates) after consideration of economic and social values and ecological requirements. Watershed planning has also been initiated in other areas, including the North Saskatchewan River and Battle River Basins.
3.2
Drinking water supply
There has been marginal growth in the share of the population served by centralised municipal water systems. Stable connection rates reflect a stable rate of urbanisation. Water use in the residential and commercial sectors has tended to increase. In 1994 efficiency concerns with respect to municipal water management prompted the CCME and Canadian municipalities to adopt the National Action Plan to Encourage Municipal Water Use Efficiency. The issue of municipal water use remained alive in the second half of the decade, when over one-quarter of Canadian municipalities reported water shortages at one time or another as a result of drought, infrastructure problems or growth in consumption. Since then, the provinces have implemented various measures. Ontario and British Columbia introduced new plumbing codes promoting water efficiency. The Federation of Canadian Municipalities promotes
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development of sustainable green municipal infrastructure through its best practices guide for green technologies. The Action Plan also suggested mandatory implementation of water metering. Progress has been slow; metering reached about 57% of the municipal population in 1999 (the most recent year for which figures are available), up from 52% in 1991. While all provinces and territories have made progress, the metering penetration rate still varies widely among different regions. Rates in the dry prairie provinces (Manitoba, Saskatchewan, Alberta), Nova Scotia, Ontario and the Northwest Territories are much higher than those in Newfoundland and Labrador, Quebec, British Columbia and Yukon. Per capita daily consumption in 1999 was 50% higher in unmetered households than in metered ones (433 vs. 288 litres). Even where stress on water resources is not a major concern, in many cases potential savings in capital and operational costs will justify stronger implementation of water metering, particularly in combination with conservation-oriented pricing structures. Significant drinking water quality issues have arisen in recent years. Dysfunctions in municipal water supply in Walkerton (Ontario) and North Battleford (Saskatchewan), leading to severe health impacts, prompted various provincial responses across the country (Box 3.2). Contamination of rural household wells is also of concern. About 25% of Canada’s population (or 8 million people) relies on groundwater for domestic use; 3 million people draw water from private rural household wells and 5 million are served by small municipal water supply systems. Percentages vary across Canada, reaching 100% in Prince Edward Island and over 60% in New Brunswick and the Yukon Territory. In other areas groundwater is mainly used for stock water supply (Alberta, Saskatchewan and Manitoba). Scientists suspect that many rural household wells are contaminated by substances from septic systems as well as from underground tanks, used motor oil, road salt, fertiliser, pesticides and livestock wastes. Estimates suggest that about 1 000 000 people routinely depend on wells that do not meet water quality guidelines for bacteria (some 400 000 for nitrates and 300 000 for arsenic). Improving protection of private wells has become part of various recent provincial water strategies, as well as of the CCME source-totap initiative (Box 3.2). Many First Nation and Inuit communities continue to lack adequate water supplies. A 2003 national assessment of water and waste water systems in First Nation communities indicated that about 29% of the 740 community water systems assessed presented a potential high risk that could negatively impact water quality. Another 46% were classified as medium-risk systems; the remaining 25% were in the low or no risk category. To address this problem, the federal government provides funding under the 1998 Aboriginal Action Plan.
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4.
OECD Environmental Performance Reviews: Canada
Connection to Sewerage and Waste Water Treatment 4.1
Municipal waste water
The rate of connection to sewerage networks increased slightly over the review period, reaching about 75% of the population (Table 3.4). The share of inhabitants connected to sewers but not to a treatment plant fell from 10.6 to 2.5% (Figure 3.2). Quebec, which had a large backlog in treatment infrastructure, accounted for almost all of the progress. Progress was also made during the review period in upgrading the level of treatment, which varies considerably across Canada, mostly depending on whether discharges are to inland or coastal waters. Many tertiary treatment plants exist in Ontario. However, there are none in the Atlantic provinces, where almost half of all sewage (including all waste water from the city of Halifax) is still discharged to coastal waters without treatment. In British Columbia most sewage treatment is primary, whereas in the prairie provinces secondary treatment is prevalent. First Nation and Inuit communities still do not have the same access to adequate waste water services as other Canadians. The Canadian water and waste water sector mostly consists of small management units, but clustering into larger management units is gaining momentum. This trend should be encouraged, as improved efficiency in delivering water and waste water services requires larger management units. The increasing complexity of treatment processes requires more sophisticated management (e.g. know-how, more rigorous quality assurance procedures and accountability mechanisms, staff training). Municipalities are also generally ill prepared to address long-term management of their infrastructure assets: few have inventories showing the condition of their assets or take a planned approach to asset renewal. Some provinces are now forcing (e.g. the 2002 Sustainable Water and Sewage Systems Act in Ontario) or encouraging (e.g. the 2002 Quebec Water Policy) municipalities to adopt more systematic approaches to asset management. At the present rate it may well take another 20 years of effort before Canada fully equips itself with the municipal waste water infrastructure it needs. The task that lies ahead includes: providing sewage treatment for the remaining 2.5% of the population already connected to sewers but not served by a treatment station; upgrading treatment for some or all of the 14% of the population served by primary treatment only; disinfecting sewage effluent where downstream swimming waters or water supply intakes are at risk; dealing with pollution caused by stormwater runoff and combined sewer overflows; and renewal of aging pipe networks and treatment capacity. This represents a significant challenge at the same time that considerable investment will be needed to upgrade drinking water supply systems.
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Population connected to public waste water treatment plants, early 2000a
Figure 3.2
Canada
72 71
USA
64
Japan
Primary treatment only
77
France
Secondary and/or tertiary treatment
91
Germany
All treatment
63
Italy United Kingdomb
95
OECD Europec
67 64
OECDc 0
30
60
90
% of total population
a) Or latest available year. b) England and Wales only. c) Secretariat estimates. Source: OECD.
Table 3.4 Population connected to public waste water treatment plantsa % of the total population
1983
Total population 100.0 of which: Not connected to sewers (independent treatment) 28.1 Connected to sewers 71.9 of which: Population not connected to a sewage treatment plant 20.4 Population connected to a sewage treatment plant 51.5 of which: Primary treatment 11.4 20.2 Secondary treatmentb Tertiary treatment 19.9
1986
1989
1991
1994
1996
1999
100.0
100.0
100.0
100.0
100.0
100.0
28.4 71.6
28.5 71.5
26.9 73.1
27.1 72.9
25.9 74.1
25.7 74.3
19.9 51.8
13.8 57.7
10.6 62.4
5.4 67.5
4.3 69.8
2.5 71.8
10.8 18.7 22.3
14.5 20.3 22.9
14.9 20.7 26.8
16.9 22.4 28.2
16.6 22.5 30.7
14.1 28.0 29.8
a) Estimates based on data extracted from MUD Municipal Waste Database, extrapolated to the whole population. b) Includes waste stabilisation ponds. Source: MUD Municipal Waste Water database.
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Many Canadians live in rural areas that cannot easily be connected to sewer networks. About one-quarter of the population relies on septic tanks. Little is known about their operational performance, but widespread contamination of private household wells must come partly from this source. Septic tanks are also responsible for the release of about 15 000 tonnes of nitrogen and 1 900 tonnes of phosphorus per year to groundwater; the latter figure can be compared with the 5 000 tonnes of phosphorus discharged annually from Canada’s sewage treatment stations.
4.2
Industrial waste water
Since 1992 the pulp and paper industry has reduced releases to water of chlorinated dioxins and furans by 99%, of BOD by 94% and of total suspended solids by 70%, according to a 2003 government report. Discharges of dioxins and furans fell below measurable levels in the mid-1990s. These reductions were achieved although production increased; the eco-efficiency of the pulp and paper industry has therefore improved tremendously. Discharges of suspended solids per tonne of pulp produced have fallen by 80% and BOD by as much as 95% over the past two decades. The chemical industry has also made substantial progress in reducing emissions. Those to water as a share of total emissions (not counting CO2) by companies belonging to the Canadian Chemical Producers’ Association (CCPA), which collectively produce over 90% of all chemicals in Canada, fell from 50% in 1992 to less than 1% in 2000. Emissions of metals to water fell by 97% in the same period. The greatest reductions were in emissions of manganese, chromium, selenium, antimony, zinc and lead. The metal mining industry also considerably reduced discharges of toxic substances during the 1990s. The 1994-2000 Accelerated Reduction/Elimination of Toxics (ARET) programme is Canada’s main example of a voluntary effort to reduce industrial discharges. A partnership between industry and federal government, ARET included participation by 171 companies, with 318 facilities representing nine major Canadian industrial sectors (Box 7.2).
4.3
Policy framework
A range of instruments, both command-and-control and voluntary, are used to reduce discharges of municipal and industrial waste water. Provincial permitting regimes, based on provincial laws and regulations, provide basic control on a site-bysite basis. However, at the federal level the Fisheries Act is used to control substances deleterious to fish and fish habitat. Regulations under this act deal with effluents from several industry sectors. The pulp and paper regulations (1992) extended discharge
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limits for total suspended solids and biochemical oxygen demand to all existing mills and stipulated that no effluents discharged should be acutely lethal to rainbow trout in 100% effluent. Other regulations under the Fisheries Act deal with effluents from metal mining, petroleum refineries, meat and poultry processing, and potato processing plants. The pulp and paper (since 1992) and metal mining (since 2002) regulations require facilities to monitor and report on the environmental effects of discharges so the impact on aquatic ecosystems can be assessed. Under the Canadian Environmental Protection Act (CEPA) and its regulations, the federal government can require the formulation of pollution prevention plans for the control of specific toxic substances (e.g. chlorinated dioxins and furans, chlor-alkali-mercury, chlorobiphenyls). While each of the above rules addresses specific issues, licence holders (including municipalities) complain that weak co-ordination in enforcing of this mix of provincial and federal regulations creates uncertainty and leaves them vulnerable to prosecution. This issue should be addressed in the CCME under the Canada-Wide Accord on Environmental Harmonisation.
5.
Integrating Agricultural and Water Policies
Agriculture (i.e. crop and animal production, excluding support activities) contributed about 1.2% to Canadian GDP in 2002. Just 4.5% (411 800 km2) of total land area is arable and cropland and 2.9% (268 760 km2) permanent grassland. Agricultural production is intensifying (e.g. strong growth in number and size of piggeries, particularly in Manitoba and Ontario). However, use of nitrogenous fertilisers and pesticides remains low by OECD standards (Figure 3.3) and the impact of agricultural activities on surface or groundwater (e.g. pesticides leaching to groundwater from intensively developed cropland, contamination of surface water from feedlot runoff) is regional rather than ubiquitous. The first OECD Environmental Performance Review recommended that Canada use a combination of measures to lessen the impact of agriculture on water quality. Measures implemented have been mainly voluntary, but a more comprehensive and rigorous approach is now being taken in partnership with farmer organisations. Environmental aspects feature prominently in the recent Agricultural Policy Framework (APF) jointly promoted by federal, provincial and territorial governments. The APF provides for setting water-related performance measurement indicators and targets; it also allocates funding for “environmental scans” to be carried out on all Canadian farms and encourages adoption of environmental farm plans for every farm where corrective action is needed. As of July 2003, APF implementation agreements had been signed between the federal government and Alberta, British Columbia, New-foundland and Labrador and Quebec.
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Figure 3.3
Agricultural inputs Use of pesticides, early 2000a
Use of nitrogenous fertilisers, 2000 Canada
Canada
3.8
USA Japan France Germany Italy United Kingdom
5.7 11.3 12.4 15.3 7.6 16.0 8.8
OECD Europe OECD
6.2 0
5
10 15 20 tonnes/km2 of arable and permanent crop land
0.07
USA Japan France Germany Italy United Kingdomb
0.20 1.50 0.51 0.26 0.44 0.52 0.29 0.21
*OECD Europe *OECD 0.0
0.5
1.0 1.5 2.0 tonnes/km2 of arable and permanent crop land
a) Or latest available year. b) Great Britain only. Source: FAO; OECD.
5.1
Nutrients
At a national average of 13 kilogrammes per hectare of agricultural land, Canada has one of the lowest nitrogen surpluses and the fourth-best nitrogen efficiency in the OECD area. Nevertheless it has shown by far the largest increase in this indicator of any OECD country. For about 47% of Canada’s agricultural land (much of it in the semi-arid agricultural areas of the prairie provinces and British Columbia) there is a low risk of water contamination by nitrogen; for 39% there is an intermediate risk and for 14% (e.g. the Lower Fraser Valley and Vancouver Island in British Columbia, southern Ontario and the St. Lawrence Lowlands in Quebec) the risk is high. Provincial governments are taking measures (regulations, subsidies, provision of information) to mitigate risks from nutrients. In Quebec a Regulation for the Reduction of Pollution of Agricultural Origin was adopted in 1997, requiring livestock producers to prepare a nutrient management plan (“agri-environmental fertilisation plan”) for the storage and application of manure, compost and mineral fertilisers and specifying appropriate periods and amounts for application. The Quebec government also provides subsidies up to 70-90% for construction of manure storage facilities; farmers must have sufficient manure storage space (for a minimum of 250 days, depending on when the facility was built) and refrain from spreading manure between
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1 October and 31 March. The 1997 Regulation has been replaced by the 2002 Regulation Respecting Agricultural Operations. The new regulation reiterates the need for a nutrient management plan, introduces a farm phosphorus balance (which must reach equilibrium by 2010) and prohibits further development of pig production in areas with excess manure until the end of 2004. In Ontario the 2002 Nutrient Management Act calls for regulations to establish mandatory nutrient management plans, certification of commercial land applicators of materials containing nutrients, distance requirements for manure and biosolids application near wells and waterways, a ban on land application of untreated sewage, and setting of minimum quality and application standards for land-applied nutrients. The regulations will gradually enter into force for different categories of farms between July 2003 and 2008. In Alberta an amended Agricultural Operation Practices Act came into force in 2002, with detailed rules concerning manure spreading on agricultural land. In Manitoba the 2003 Water Strategy provides for the registration and inspection of manure storage facilities for all intensive animal husbandry operations with over 300 animal units.
5.2
Pesticides
Each province and territory has legislation to regulate use of pesticides. Most provinces also actively promote pesticide reduction programmes. At the product level, the Federal Pest Management Regulatory Agency (part of Health Canada) provides a consistent national registration system for pesticides under the Pest Control Products Act. Provincial/territorial legislation may be more restrictive than the Federal Act but it cannot be less restrictive. Use of pesticides has fallen as a result of changes in cropping patterns (e.g. planting soybeans instead of corn), the emergence of new pesticides and measures taken. However, some provincial pesticide reduction targets have not been met. In Ontario pesticide use declined by about 40%, short of the 50% reduction goal set by the Food Systems 2002 Programme. In Quebec the reduction since 1992 has amounted to 12% for insecticides and 31% for herbicides, far below the overall 50% goal for 2003.
5.3
Adverse weather risks
A variety of agricultural programmes have shifted much of the risk of adverse weather conditions (flooding, sodden fields, frost, hail and drought) for agricultural production away from landholders and towards government. Virtually all crops on almost all arable land (200 000 km2) can be covered for adverse weather by programmes under the Farm Income Protection Act (FIPA), particularly by the Crop
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Insurance Programme. At the national level, federal and provincial governments pay around 65% of crop insurance premiums (depending on the province) and virtually all administrative costs. Indemnity payouts in 2000 amounted to CAD 458 million. These programmes have more recently been subsumed in the Agricultural Policy Framework; the APF envisions expanding production loss protection beyond crops to livestock and increases the ability to provide for income stabilisation and disaster mitigation. Details on how these programmes will compensate producers for the risks of natural disasters have not yet been worked out, but it is intended to avoid overlaps in protection and to be production and market neutral. Final decision making should take account of the potential perverse effects of subsidised premiums, such as increased flood damage.
6.
Expenditure, Financing and Water Charges
In a country where the public often regards water as a limitless resource and a gift of nature, the notion that water is also an economic good with social and ecological functions is not yet readily accepted. Therefore, water management often lacks an economic information and analytic base. Many price signals are inappropriate and subsidisation is pervasive. There has been some progress with the use of metering and economic instruments. Overall, the three corresponding recommendations made in the previous OECD Environmental Performance Review of Canada can largely be made again.
6.1
Expenditure
Total public and private water-related pollution abatement and control (PAC) expenditure fluctuated only slightly in real terms in the 1990s, at an average of about CAD 3 billion per year (1995 prices). This figure amounts to roughly 0.4% of GDP, somewhat below the share spent in many other OECD countries. Public water-related PAC expenditure in the second half of the 1990s was mostly incurred at the municipal level (about CAD 2.2 billion per year) and to a much lesser extent by the federal government (CAD 0.3 billion) and the provinces (CAD 0.2 billion). Private water-related PAC investment expenditure in industry (excluding agriculture, transport and services), which was dominated by the pulp and paper, crude petroleum and natural gas sectors, fell sharply in the second half of the 1990s, from CAD 804 million in 1995 to CAD 277 million in 1998. At the same time, expenditure also shifted from end-of-pipe processes towards more integrated cleaner production processes.
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Municipal water charges and financing
Little progress has been made to date in implementing the user pays principle, although it features in various provincial policies and is the “headline” strategy in the 1987 Federal Water Policy. Municipal water prices are among the lowest in the OECD area. On average they are less than half those in most OECD countries and roughly cover half the costs of supplying water and treating waste water. Price structures generally do little to encourage conservation. Domestic users pay a flat rate where water is not metered (43% of households with municipal water services in 1999); otherwise, a uniform volumetric charge is most common (36%), followed by decreasing block charges (12%) and, least common, increasing block or more complex charges (9%). Even households subject to uniform some volumetric charges must in some cases (3.4 million people in 1999) pay for a set minimum volume of water, so that they are effectively on a flat rate; when this group is taken into account, almost half of households pay flat rates. Sewer charges are most commonly flat rate and are integrated in water prices. Where industries receive water from public supplies, contracts are often negotiated at bulk rates. As municipalities have the main responsibility for providing domestic water supply, sewerage and waste water treatment infrastructure and services, and as full-cost water pricing is rare, most of the required funding has come from municipalities’ general taxes (e.g. property taxes) rather than from water users. Short-term federal and provincial programmes have also contributed from time to time. Previous funding levels will not be adequate to satisfy Canada’s considerable future water infrastructure needs. While there are no recent official estimates of its overall water supply and waste water treatment needs, estimates as high as CAD 90 billion over the next 20 years have been made. To promote greater investment, since 2000 the federal government has established some targeted funding programmes (through the Infrastructure Canada Programme and the Federation of Canadian Municipalities) with a combined ceiling of about CAD 5 billion over ten years; in addition, the federal budget allocates CAD 600 million over five years for construction of water infrastructure to serve First Nation and Inuit communities. While these and corresponding provincial programmes help, municipalities should review the full range of financing options, aiming at pricing services at levels ensuring cost recovery, and using in a transition period other funding sources including various subsidy programmes that require municipalities to establish full-cost accounting procedures and full-cost water pricing policies, as well as complementary funding mechanisms such as public-private partnerships (only four existed in 2003) if public concerns about maintaining ultimate community control can be resolved.
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6.3
Economic instruments
Canada has not yet made much use of economic instruments in water management, although some provinces (e.g. British Columbia, Alberta and Quebec) impose charges on use of water for hydropower, based on the amount of kWh generated. Irrigation water charges generally cover operation and maintenance but not capital costs (including those of major rehabilitation of schemes). Consistent with the policy of having producers pay more of the true cost of water services, significant changes to water service rates were implemented in the 1980s. By 2000 the price of water had increased from CAD 11/ha to CAD 31/ha, with the irrigators paying only approximately 60% of operation and maintenance costs. In 2000 Quebec introduced a pollution charge on discharges to water (and emissions to air) from the pulp and paper industry, as part of a comprehensive package of measures aimed at reducing the environmental impact of the 62 pulp and paper mills in the province (the revenue from the pollution charge amounts to about CAD 600 000 annually). In 2002 Quebec worked out a similar package with the mining industry; it will enter into force once detailed arrangements have been agreed for every facility; other industry branches are to follow. In Ontario two experiments in water quality trading are taking place on a watershed basis (in the South Nation River and Lake Simcoe basins), which allows the trading of phosphorus credits among point and non-point sources in the catchment.
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4
NATURE AND BIODIVERSITY MANAGEMENT*
Features • • • •
Species at risk Protecting terrestrial and aquatic ecosystems Forest management International co-operation
* The present chapter reviews progress in the last ten years, and particularly since the previous OECD Environmental Performance Review of 1995. It also reviews progress with respect to the objective “maintaining the integrity of ecosystems” of the 2001 OECD Environmental Strategy.
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Recommendations The following recommendations are part of the overall conclusions and recommendations of the environmental performance review of Canada: • complete the national park system; expand protected areas in the southern part of the country (where habitats are under much pressure); implement the new legal and institutional setting to improve management of national parks; • substantially increase the total area of marine and wetland ecosystems under protection; • implement the new legislation for the protection and recovery of species at risk, with particular emphasis on priority species; • take the necessary regulatory and financial steps to control the introduction and spread of invasive alien species; • expand the use of economic instruments to internalise in a transparent way the positive ecological functions of forests and prevent unsustainable use of softwood resources.
Conclusions Canada was early in ratifying the UN Convention on Biological Diversity (1992) and releasing a Canadian Biodiversity Strategy (1995). Two national action plans have been prepared for the agriculture and forestry sectors (although without clear environmental targets or time frames). The 2003 Species at Risk Act will help strengthen efforts towards protection and recovery of species at risk and theircritical habitats. Ecosystem protection has progressed, with a 40% increase in total area under protection over the decade. Canada plans to establish ten new national parks, thereby covering 34 of 39 natural regions. Co-operation with Aboriginal people has been strengthened with respect to protection of wildlife habitats and forest management. Canada’s wooded area (over 10% of the world’s forests) has remained constant and provides habitat for two-thirds of the country’s wildlife. Populations of most monitored forest bird species have remained stable or increased. The share of forest area under strict protection has increased (to 7%). Co-ordination of forest management is enhanced by the Canadian Council of Forest Ministers, which has developed criteria and indicators of sustainable forest management, and by the Canada Forest Accord, which contributes to implementation of the National Forest Strategy (released in 2003). Forest certification is increasing rapidly. It now covers one-quarter of working forests. CITES enforcement has been strengthened in recent years, but fines remain low.
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However, the total number of registered species at risk is increasing (partly due to increased assessment work) and the status of most of the assessed species at risk is unchanged or has deteriorated. The number of invasive alien species continues to grow; major pathways for aquatic invaders are not regulated or monitored. While 20% of the world’s remaining natural areas are in Canada, the share of total national area protected is less than the OECD average, and less than the 12% target. This partly reflects the need to respond to Aboriginal land claims and private rights to exploit natural resources. Much of the protected area is in the North (where human impacts on biodiversity have been less evident); in southern Canada protected areas are often small in size. Wildlife and bird protection areas provide only limited geographic coverage, and this protection is often not stringent. With the world’s longest coastline, Canada has only three small national marine conservation areas and no marine protected areas (despite 1997 legal provisions). It has one-quarter of the world’s wetlands, but only 9% are protected. Clear-cutting is still by far the most common forest harvesting practice: the poor design of past clear-cuts has been addressed, but compliance with provincialcodes of practice remains largely voluntary. Forest harvest levels have steadily increased over the decade; harvest of industrial roundwood is getting very close to annual allowable cut, especially for softwood. There is considerable debate regarding the factors that contribute to this increase, including market conditions, stumpage fees and the forest management regime. ♦
1.
♦ ♦
Policy Objectives
Federal, provincial and territorial ministers with responsibility for forests, wildlife, fisheries, parks and other areas establish national biodiversity priorities. Canada is working towards meeting the unofficial (but internationally recognised) target of protecting 12% of all representative natural areas as parks and reserves. Ecosystem management performance can further be assessed against the recommendations of the 1995 OECD Environmental Performance Review of Canada: – continue efforts to increase the extent of protected natural areas in line with the goals set for 2000 (protection of 12% of the total territory and at least 5% of each eco-zone); increase the level of protection in certain protected areas by, for instance, reducing flooding, logging and mining in sensitive areas; increase the total area both designated for protection and actually protected; – develop a network of representative marine parks or marine conservation areas; – adopt special programmes, including the use of financial incentives, to develop natural areas in or near urban and rural settings;
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– give special consideration to wildlife protection in areas where there are severe pressures from human activities; – integrate the goals of nature protection with agricultural, forestry and mining activities, and accelerate the adoption of sustainable-use practices for biological resources in all sectors of the economy, including agriculture, fishery and forestry; ensure that development and harvesting of forests in the west and of fisheries in the east is performed in a more sustainable manner. Regarding management of forest resources, the 1995 Environmental Performance Review recommended that Canada: – expand scientific knowledge of biodiversity of forest ecosystems and its measurement; evaluate the impact of harvesting methods, sylviculture and other forestry operations on biodiversity; continue the creation of networks of protected forest ecosystems with the aim of reaching 12% of the total wooded area; – develop and apply alternative forestry methods that better integrate productive, environmental and social values as alternatives to either total protection or harvesting for a variety of forest ecosystems across Canada, including the west coast rain forests; – translate sustainable development objectives into the actual management of provincial forests through: i) improved technical and economic clauses in some licence agreements between the provincial governments and private companies; ii) the development of instruments, particularly economic instruments, to encourage non-government parties to take account of sustainable development objectives; iii) training in new techniques for company personnel; and iv) the development of statistical, legal and human resources in the provincial administrations for orientation and monitoring of forestry management according to new forestry codes; – continue promoting at international level the sustainable development of all forest resources, with the objectives of: i) improving responses to global climate change and biodiversity issues; ii) combating trade distortions that may arise from exploitation of forest resources in certain countries without regard to the environment and the longer term; and iii) continuing efforts for certification of forest products produced in a manner consistent with sustainable development.
2.
Biodiversity
Canada is home to 71 500 known wild species; it has been estimated that up to 66 000 species may yet remain to be discovered. Despite protection measures and Canadians’ traditional respect for nature, the number of registered species at risk is
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increasing, partly due to increased assessment work. Of the 613 species (0.8% of known species) that have been assessed nationally, 160 are in danger of immediate extinction, 108 are threatened (i.e. likely to become endangered) and 140 are of special concern (i.e. exist in low numbers). Since the mid-19th century 33 species have disappeared (12 are extinct and 21 are still found elsewhere in the world). Two fish species from Hadley Lake (British Columbia) became extinct in 1999. The share of species at risk is particularly worrying in the case of reptiles (74%), amphibians (45%) and mammals (33%) (Figure 4.1). Increasing pressures on biodiversity reflect population growth in major urban regions and corridors, air and water pollution, alien invasive species, intensive farming and increasing timber harvests. In the North human impacts are less evident, but there is concern about the cumulative effects of mining, development of oil and gas exploitation, climate change (particularly effects on polar bears) and long-distance transport of airborne pollutants (particularly effects on fragile Arctic and taiga ecosystems) (Chapter 8). In 1985-20002, the Committee on the Status of Endangered Wildlife in Canada (COSEWIC), an advisory body created in 1978, reassessed the status of 162 species at risk (endangered and threatened). Most had shown either no improvement or a deterioration in their status (Figure 4.1). Of the 160 species listed by COSEWIC as endangered, 158 are subject to recovery plans and 43 are addressed under broader ecosystem-based initiatives. Only a small share of species listed by COSEWIC is protected under provincial legislation (Table 4.1). The number of invasive alien species continues to grow, particularly in the case of aquatic invaders. These species threaten ecosystems and the economy across Canada (e.g. coping with zebra mussels in Lake Erie alone costs CAD 500 million a year). Responsibilities for dealing with alien species are spread across several administrations. Efforts are being made to improve co-ordination. A Canadian Council of Fisheries and Aquaculture Ministers Task Group was established to develop a national plan for aquatic invasive species. A national plan for all invasive species is being developed under the Joint Ministers’ Council, which comprises both provincial and federal fisheries, forestry and wildlife ministers and is led by Environment Canada. However, discharges of ballast water (a major pathway for aquatic invaders) are not monitored. There is no regulation comparable to that in the US, under which all ships put into service after 2005 must have on-board ballast water treatment systems. The International Joint Commission seeks to co-ordinate and harmonise bi-national efforts on invasive alien species. Canada was the first industrialised country to ratify the UN Convention on Biological Diversity (in 1992). The Convention’s Secretariat is located in Montreal. The Canadian Biodiversity Strategy (CBS), signed by federal, provincial and territorial
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Figure 4.1 Fauna and flora State in Canada, early 2000s
Change in status of reassessed species at risk, 1985-2002
total number of species
Mammals
193
Birds
426
Fish
No longer at risk
Status improved
1 021
Reptiles
42
Amphibians
42
Vascular plants
No change
Status worsened
4 120 0
20
40
60
80
100
0
20
Percentages
Threateneda
40
60
80
Number of species reassessed
Not threatened
Threatened speciesa
Mammals Canada
USA Japan France
13
33
37
Italy
1
6
7 29
41
26
68
18
22
24
24
14
20
3
2 13
24
Vascular plants
8
7
11
Germany
United Kingdom
Fishb
Birds
5
32 11
6
9
0 20 40 60 80 100 0 20 40 60 80 100 0 20 40 60 80 100 0 20 40 60 80 100 %
%
%
%
a) Categories “critically endangered”, “endangered” and “vulnerable” of the IUCN classification in % of known species. For Canada, data refer to COSEWIC categories “endangered”, “threatened” and “special concern” categories; includes also extinct and extirpated species. b) Freshwater fish only for Japan, Germany, Italy and United Kingdom. Source: Environment Canada; OECD.
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resource ministers in 1995, identified over 150 strategic directions. Priorities to implement the CBS in 2001-06 were set as: developing information; monitoring trends in biodiversity; controlling alien invasive species; engaging Canadians through biodiversity stewardship. Federal biodiversity action plans are to be initiated in eight areas (agriculture, education, fisheries, forestry, international co-operation, northern affairs, parks and wildlife). In practice only two such plans have been released, for agriculture (1997) and forestry (2002). These plans do not include clear environmental targets or time frames. The agricultural action plan is to be implemented through the agricultural policy framework (Chapter 5). A wide range of provincial incentives assist farmers to protect wildlife habitats (e.g. the Alberta Conservation Association Habitat Programme, the Manitoba Critical Wildlife Habitat Programme, the Saskatchewan Fish and Wildlife Development Fund, the Nova Scotia Habitat Conservation Fund).
Table 4.1
Species at risk under provincial jurisdiction, 2002 Species at risk legally listed Total species at riska
Provinces: Quebec Ontario British Columbia Alberta Saskatchewan Manitoba Newfoundland and Labrador New Brunswick Nova Scotia Prince Edward Island Territories: Nunavut Northwest Territories Yukon
Number
(%)
25 84 62 25 16 14 11 10 15 7
10 25 0 13b 11 10 0c 6 11 0c
40 30 0 52 69 71 0b 60 73 0b
8 10 4
d d
1
.. .. 25
a) Includes only endangered and threatened species, as recorded by the Committee on the Status of Endangered Wildlife in Canada (COSEWIC). b) Alberta does not have an Endangered Species Act, only provisions in the Wildlife Act. c) Newfoundland and Labrador (in 2002) and Prince Edward Island (in 1998) passed an Endangered Species Act, but have not yet listed any species under it. d) No Endangered Species Act. Source: Sierra Legal Defence Fund.
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The 1999 Canadian Plan for the Protection of Species at Risk (CPSR) is based on the Accord for the Protection of Species at Risk, the Species at Risk Act and the Habitat Stewardship Programme. Following commitments made in the 1996 Accord for the Protection of Species at Risk, the federal, provincial and territorial layers of government have begun to assess the status of all species across Canada through the Endangered Species Conservation Council. The Council guides COSEWIC activities and the preparation of recovery plans for species at risk. Enacted in December 2002 (following years of intense debate to clarify federal and provincial competencies), the Species at Risk Act (SARA) prohibits killing, harming, possession of, or trade in species listed under SARA and the destruction of their habitats. SARA is being introduced using a phased approach, with most sections entering into force in June 2003 and the remaining provisions, including general prohibitions, in June 2004. From June 2003 federal authorities may issue emergency orders to protect listed species outside areas managed at the federal level; from June 2004 they may consider the impact on species’ critical habitat before issuing authorisations for specified activities. SARA may also provide compensation (at the discretion of the Minister of the Environment) to private landowners affected by significant losses resulting from efforts to conserve critical habitats (60% of endangered species’ habitats are on private land). In 2002 the federal Habitat Stewardship Programme (HSP) supported protection of 220 species at risk by restoring 72 000 hectares of land and 180 kilometres of shoreline. Federal expenditure on the NSSR since 2000 has been around CAD 35 million per year. In 2003 an additional CAD 15 million was allocated for implementation of SARA. The HSP generates matching funds of CAD 30 million a year.
3.
Protected Areas
Canada has special responsibilities for maintaining many globally important eco-systems, and 20% of the world’s remaining natural areas. Good (federal and provincial) efforts to protect these ecosystems have been made over the decade, as demonstrated by a 40% increase (30 million hectares, an area the size of Italy) in total areas designated as under protection (Figure 4.2). In Quebec protected areas have increased from 2 to 8 million hectares over the decade. The Natural Heritage Conservation Act was passed in 2002 to promote further creation of protected areas. However, there is a clear difference between designation and actual protection. About 10% of Canada’s territory is subject to some level of protection (IUCN I-VI), which is below the OECD average and below the 12% unofficial national target (Figure 4.2). Nearly 6% is strictly protected (IUCN I-III). Federal agencies manage one-third of protected areas (33 million hectares) (Table 4.2); provinces (and private entities) manage the
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Figure 4.2 Protected areas
Trends in Canada
Size of strictly protected areas in Canada, 2002 Number of areas in each size range (km2)
% of total area
14 12
700 International target, all classes of protected areas
600 500
10 Total protected, all classes
8
400
6
300
4
200 100
2 Strictly protected
0
0 10 >
>
1
>
00
0-
00
00
0
10
00
00 10
0-
1
-1
10 1-
10 >
>
>
2000
1
1980
1-
1960
0.
1940
0.
1920