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Was I right about air regulation 419/05?

Ten years ago, the Ministry of the Environment asked for my opinion on the regulatory reform initiative that culminated in the new air regulation, O.Reg. 419/05. I wrote a column about it in the August/September 2001 issue of Hazardous Materials Management. (reproduced below). It is reassuring, in a sad sort of way, that I still agree with what I said then, and that the MOE has now started to think about my analysis. But I did not expect, back in 2001, that:

  • the new regulation would be so dysfunctional even for larger companies,
  • the new ESDM/modelling/monitoring process would prove so susceptible to abuse, (It is depressingly easy for the MOE to alter a facility’s ESDM until it predicts noncompliance, on the ground that they are being “conservative”), nor that
  • Reg. 419 would abandon the long-established principle that there should always be an appeal from administrative discretion.

Here’s what I wrote in 2001:

“Air and water risks [New Ontario air regulations]
Saxe, Dianne. Hazardous Materials Management. Aug/Sep 2001. Vol. 13, Iss. 4; p. 38

The biggest thing that has changed since Walkerton, Ontario’s drinking water tragedy, is that the provincial environment ministry is taking some initiative again after years of retreat. Oddly, the big news is about air, not water.

Ontario’s 30-year-old system of air regulation is obsolete. Many standards ignore current science, the calculation methods are inaccurate, and permits control the wrong things. Almost all of this may change in the next three to five years: the parameters regulated, the limits to be met, the time periods they apply to, how emissions are calculated, how permits are granted, their scope, and the consequences of a breach.

Some of these changes are already underway.

New limits and parameters from Canada-wide standards and Ontario’s own standard-setting process; the new air monitoring regulation (127/01), with publication of results on the Internet; the demand for site-wide emission surveys when air certificates are issued; and, of course, Drive Clean.

However, much more is to come, including emission trading, best practices guides and positive incentives for emission reductions. Replacement of Ontario’s Regulation 346 dispersion model with more accurate U.S. ones will reveal that many current emissions are actually two to ten times higher. This may require widespread remedial action, especially if background contaminants are added. The environment ministry muses about using comprehensive site-wide certificates of approval only as “rewards” for environmental leaders, but I expect a widespread shift to such approvals. They allow both the ministry and industry to focus on their core competencies; they provide better air quality for the public, and they avoid unproductive paperwork.

[Graph Not Transcribed]

The environment ministry recently asked me to speak on another of its new air initiatives, the proposed separation of risk assessment from risk management. In general, I like the concept. However, the current proposal may be very burdensome for small companies and it leaves out an essential step: the balance between cost and benefit.

The two-step concept

Standard setting always has two components. First, deciding what emissions are “safe,” i.e., don’t harm people or the environment. Second, deciding what can actually be achieved, considering technology and cost. Historically Canadians have done both steps behind closed doors, then set a single criterion. The U.S., by contrast, sets two publicly available separate standards: the ideal and the real. The U.S. Supreme Court recently upheld this two-standard process despite fierce industry objection. It has the great merits of transparency and public accountability, and makes compromises glaringly clear.

The Ontario environment ministry plans to maintain primary responsibility for the risk assessment step, i.e., for setting “effects-based” criteria. The onus will then shift to industry to promptly prove technical and/or economic grounds for delaying implementation and/or relaxing the criteria. In principle, this is reasonable because industry knows its own technical and economic facts better than the government.

However, the process may be extremely onerous, especially for small businesses. In fact, the entire program is a large company model. Once “effects-based” numbers are proposed, industry will have to make a quick, thorough, and professional case for different risk management criteria, then engage in expensive and time consuming negotiations. Most small businesses have neither the sophistication nor the resources to do so; many won’t even know about the deadlines in time. Worse, the environment ministry proposes to publish (on the Internet) full financial details of any company wishing to argue that it faces economic constraints. This is a punitive step few will want to face.

The ministry argues that industry associations will fill the gap. Some will, especially associations of substantial companies in a homogeneous sector, but others can’t. I’m also doubtful about the ministry’s assertion that most businesses can comply with any new limit within four years. Four years is lots for some but not for others depending on the parameter, the useful life of equipment and processes, and the availability of alternatives.

In addition, the proposal deliberately excludes cost-benefit analysis. It is based on an unspoken assumption that any effect-based limits developed through the risk assessment process ought to be promptly achieved throughout the province, regardless of cost.

I don’t agree.

This assumption may have merit for those contaminants that are human health hazards in outdoor air, but it is not self-evident for effects that are merely aesthetic or that have no practical relevance. For instance, why put expensive emission controls on dichloromethane if it breaks down rapidly in sunlight, and isn’t a health hazard outdoors? Is it fair or worthwhile to put strict controls on local industries if most of the problem comes from outside the province or from uncontrolled sources like vehicles? Who will check whether the products that people will substitute are safer, or just less studied?

The proposed risk management framework is a good concept, but it needs to incorporate cost-benefit analysis and must make compliance practical for small business.

Dianne Saxe, D. Jur., is a leading environmental lawyer with her own practice in Toronto, Ontario.”

Am I being too harsh about 419/05?  Have you had any good experiences with it? Please write and let us know; we look forward to hearing from you.


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