��������������� THE GALLON ENVIRONMENT LETTER ������ Canadian Institute for Business and the Environment ���������� 506 Victoria Ave., Montreal, Quebec H3Y 2R5 ����������� Ph. (514) 369 0230, Fax (514) 369 3282 ������������������� Email� [EMAIL PROTECTED] ��������������� Vol. 3, No. 12, May 3, 1999 ********************************************************************* THE ENVIRONMENTAL COMMISSIONER REPORT ON ONTARIO The Environmental Commission of Ontario (ECO) last week released its most recent annual report on government activities to protect the human environment in Ontario.� The Commission was created under the Ontario Environmental Bill of Rights. The Commission is an independent agency established by law to monitor government efforts to protect human health and ensure that every citizen the right to a clean environment The Environmental Commissioner, Eva Ligeti, released her latest report entitled, "Open Doors� Ontario's Environmental Bill of Rights". The 350 page report is full of detailed analysis on issues including climate change, waste management, and air & water pollution. The findings of the report, while focused on Ontario, may provide insight into the performance of other jurisdictions which face similar issues. The full report is available from the Environmental Commissioner of� Ontario (ECO), 1075 Bay St., Suite 605, Toronto, Ontario M5S 2B1, Ph. (416) 3253377, fax (416) 3253370, You can download a copy from the ECO website at <http://www.eco.on.ca/>http://www.eco.on.ca/� email [EMAIL PROTECTED] **************************************************************** 43% CUT TO THE ONTARIO ENVIRONMENT BUDGET� Before reviewing the findings of the Commissioner's report, one needs to understand the background of environmental protection efforts in Ontario over the past several years. Organizations have seen the Government of Ontario change course with commitments to cutting red tape and to getting environment protection out of the way of economic progress. The government cut the budget for environmental protection by 43% and has committed to reducing staff by a similar amount. Like Alberta, Ontario has committed to reducing its environmental regulations by half. The Canadian Institute for Business and the Environment analyzed the detailed "budget estimates" of the Ontario Ministry of the Environment (MOE) for 199595 and for 199798.� The institute found that the operating budget of the environment ministry was cut from $365.4 million in 199495 to $211.0 million in 199798.� That is a loss of $154.4 million, or 43 per cent, from Ontario environmental protection budget. Cuts to various budget lines include, o��� Funding for the development of environmental programs and standards was cut 99 per cent from $51.0 million in 1994� 95 to $0.5 million in 1997 to 1998.� As a result, Ontario� reduced its own ability to design standards and carry out voluntary environment programs. o��� Environmental laboratory services funding was cut 40.3% from $29.5 million to $17.6 million o��� Compliance and enforcement branch budget was reduced 30 per cent, or $14.7 million from the $49.1 million in 199495 to $34.4 million o��� Capital funding for environmental technologies and processes including new technologies,� recycling and energy conservation equipment, was virtually eliminated, being dropped 99% from $72.2 million in 199495 to $500,000 in 1998 o��� Funding for "Beaches Restoration" was cut 97 per cent from $12 million in 19956 to $400,000 in 199798. o�� MOE Environmental Science and Technology operational funding was cut 75.8 per cent from $19.4 million to $4.7 million o��� MOE staff positions were cut 880 positions for a total of 36%,� from 2,430 in 1995 to 1,550 in 1997. The is this deteriorating condition in which the Ontario Environmental Commission finds itself tracking efforts to protect the human environment. For a complete review of the budget cuts ask for the email report to be send to you, contact CIBE at [EMAIL PROTECTED] ************************************************************************* ONTARIO'S WASTE MANAGEMENT VOLUNTARY ENVIRONMENTAL MEASURE FAILING The Ontario Ministry of the Environment (MOE) announced in October 1998 that instead of using regulations to acheive waste recycling, it would seek to have industry voluntarily create a $20 million a year fund to support the Blue Box Recycling program. However, industry has failed to voluntarily commit the money. As a result, MOE admitted to the Commission in March 1999, "that no specific target has been set for industry financial support."� Furthermore, MOE reported that it had reduced its $20.0 million project of voluntary contributes to an estimated $11.0 million, with no security that this amount will be met. ************************************************************* LACK OF VOLUNTARY DRIVERS THE PROBLEM The reason industry hasn't committed yet, is because the voluntary nonregulatory initiative (VNRI) does not have a proper driver. The drivers of voluntary initiatives are outlined in the study by the Canadian Institute for Business and the Environment entitled, "Voluntary Environmental Measures, The Canadian Experience" (September 1997, Toronto, copies available). The report found that if the drivers are not present, or are weak, the chances of creating and implementing a successful voluntary measure are almost nil. The development of voluntary measures in the presence of pressing and fundamental needs (these drivers) will ensure their success. The drivers include: o�� threat of regulation o�� erosion of goodwill o�� ecoefficiencies that improve corporate income o�� banks and insurance companies liability reduction requirements o�� sense of community responsibility and visionary leadership In this case, MOE did not have draft regulations written to implement in the event the voluntary approach didn't work. It was just such regulations that were, indeed,� written regarding 3Rs legislation in 1985 that drove industry then to avoid regulation by donating more than $20 million a year for a number years to the very successful OMRI recycling program established by industry. Regarding MOE's waste management policies in general, the Commission report goes on to say that, "Ontario is the only province in Canada that does not have a comprehensive product stewardship program for beverage containers." For a copy of the CIBE report, "Voluntary Environmental Measures, The Canadian Experience" , ask at email� [EMAIL PROTECTED] ******************************************************************* NEW ADMINISTRATIVE $5,000 PENALTY SET TO LOW With the lack of resources, the Ministry of the Environment is seeking cheaper ways to prosecute polluters than by using the traditional method of monitoring for, and prosecuting for, actual pollution. Instead, the MOE, in Bill 82, provided for "administrative penalties" , this is where companies are charged for not keeping up their paper work on pollution reporting. The Commission found that the maximum fine set for administrative infractions of $5,000 per day is far too low. Ontario's fines are at least ten times lower that similar administrative infraction fines in the United States. The Ontario amount is so small that the Commission stated that, "some commenters argue that the low ceiling of $5,000 for contraventions of environmental law will be perceived by many companies as a license to pollute." The companies would rather pay the inexpensive fine, rather than spend millions of dollars on establishing the proper pollution prevention measures to reduce the environmental impacts. ****************************************************************** ONTARIO MOE ALLOWS MORE WATER POLLUTION FROM CHEMICAL COMPANIES The Commission reported that a new Ministry of Environment regulation (Ont. Reg. 50/98), "increases effluent loadings limits for specified plants of several chemical, rubber, and vinyl manufacturing companies on a facility specific basis. The companies include Bayer Rubber Inc., Dow Chemical, Ethyl Canada Inc., G.E. Plastics, Geon Canada Inc., Imperial Oil Chemicals, Nova Chemicals, and Cornwall Chemicals." Many of these companies the same ones that show up as major emitters on Environment Canada's National Pollutant Release Inventory (NPRI). The Commission stated that the amendment, "allows the companies to increase discharges of pollutants such as nitrogen compounds, suspended solids, phosphorus and dissolved organic carbon." It is also these same companies, through the Canadian Chemical Producers' Association (CCPA) that are lobbying hard again the new proposed Canadian Environmental Protection Act (CEPA). See the CCPA environmental policies at its website <http://www.ccpa.ca/>http://www.ccpa.ca/ ******************************************************************** ENVIRONMENT MINISTRY PLACES ENVIRONMENT SECOND TO ECONOMIC DEVELOPMENT The Ontario Ministry of the Environment stated to the Environmental Commissioner regarding its amendments to the Effluent Monitoring and Effluent Limits� Organic Manufacturing Sector, O.Reg. 63/95, "that the proposed changes to the regulation will allow for business growth within the sector." The Environment Commissioner concludes that, "MOE is clearly more concerned about business growth within the sector", than with the environment. Unfortunately, what is not well understood is that the savings given to the companies from not having to install pollution prevention devices, results in additional economic costs to other economic units in the community. There are additional health costs, there is degradation of commercial and sports fisheries, there may be additional health costs to the provincial medical system. These externalized costs result in no net savings to the economy from this effort by MOE to save these companies from having to install pollution devices. ******************************************************************** ONTARIO MAKING FEEBLE PROGRESS IN AIR POLLUTION REDUCTION STANDARDS While Ontario has launched a campaign to ask the United State's to clean up its air pollution that is moving northward across the border affecting Canada, Ontario is falling behind in setting and enforcing its own air pollution standards. The Commission reported that, "although MOE publicized its plan to update air standards as an aggressive approach to protecting Ontario's environment, the Commission's review of MOE's actions showed the ministry's progress to be feeble." It reported that, "the ministry said it would update the standards for 70 pollutants over three years." Instead it delayed and spent, "approximately two years to finalize the rules pertaining to only nine pollutants. Even for those few pollutants, MOE merely created guidelines rather than directly enforceable standards." ****************************************************************** ONTARIO'S DECISION NOT TO ENFORCE FEDERAL FISHERIES ACT, SECTION 35 RAISES CONCERN In Canada, major national laws like the federal Fisheries Act, are allowed to be enforced by the provinces rather than by the federal government. This is in deference to the province's request for more power to administer their territory. However, in an unusual move, the Government of Ontario has decided not to enforce Section 35 of the Fisheries Act which deals with the protection of fish habitat. The Ontario Ministry of Natural Resources (MNR) posted the decision to withdraw on the Commission's Registry August 18, 1997, not allowing for public comment. Environment Canada attempted to cover the abandonment by temporarily sending eight fisheries officials to Ontario from the Atlantic region. However, their number is too small to replace the hundreds of Ministry of Natural Resources (MNR) and MOE staff that used to do the work. This virtually leaves Ontario's lakes and rivers fisheries habitat unprotected. **************************************************************** ONTARIO ENVIRONMENTAL REGISTRY The Commission's Environmental Registry is mandated by the Environmental Bill of Rights (EBR) to receive postings on the Commission's website about environmentally significant proposals and decisions, appeals of instruments, court actions, statements of environmental values (SEV's), and other information related to ministry environmental decision making. Ontario ministries must post this information on the "Environmental Registry" in order to provide the public an opportunity to make input into the decision making prior to the final decision. It is the newest service for public participation which is designed to be added on to the existing public participation mechanisms normally used by governments. The Environmental Registry can be found at the website� <http://www.eco.on.ca/>http://www.eco.on.ca/ **************************************************************** ENVIRONMENTAL REGISTRY NOT BEING USED CORRECTLY FOR PUBLIC CONSULTATION BY ONTARIO GOVERNMENT Instead of using the new Environmental Registry website as one of many key tools in public participation, the Ontario Government appears to be using the Environmental Registry as its only or primary tool for public participation.� It has virtually dropped environmental assessments and public hearings. It holds much fewer public meetings, working groups, and conducts few information mail outs. And, if you don't happen to see the information on the Environmental Registry The Government of Ontario made a decision to redefine public participation in environmental issues from one of mailings of information and the holding of public meetings and allowing questions directly to government on new proposed undertakings. It has been changed to just one of a posting on a website� on the Environmental Commissioner's website. What is required, is for the proponents to use the Commission's registry postings, in addition to the other standard public consultant methods. In another matter, the Commission is concerned that the 30 day mandatory posting required by law is being hedged by Ontario. It reported that, "Bill 82, the Environmental Statute Law Amendment Act", was posted only 10 day on the Commission's website. The Commission wrote the MOE, "urging the ministry to comply with the minimum posting period of 30 days." It found that the "shortened comment period was illegal and inadequate." Visit the MOE website at� <http://www.ene.gov.on.ca/>http://www.ene.gov.on.ca/ ************************************************************* MOE RESPONDS TO CRITICISM ON PUBLIC CONSULTATION The Ontario Ministry of the Environment issued a "Media Backgrounder" April 28, 1999 in response to the Commissioner's report (available on the MOE website http://www.ene.gov.on.ca/ ). It stated that, "for its part, the Ministry of the Environment has actively incorporated consultation into its policy and program development and its decisions. This emphasis on full consultation is shown by the ministry's initiative to post EBR registry on the Internet a year ago. As a result, we've seen a dramatic increase in the number of users. Our latest statistics which cover September 1998, show about 1,4000 hits per month on the EBR registry." ************************************************************* ONTARIO SUPPORT FOR ENVIRONMENT INDUSTRIES IS STRONG, BUT NEEDS WORK On the good news side, the Government of Ontario's support for the environment industry sector is strong, driven by the province's green industry strategy and the Ministry of the Environment's (MOE) Green Industry Office (GIO). The Commission found that, "according to a 1997 survey, the environment sector in Ontario is growing at a rate three times that of the Ontario economy as a whole, and that sales are expected to double between 1995 and 2000, from C$ 5.8 billion in 1995 to $12.2 billion in the year 2000." ***************************************************************** COMMISSION ENCOURAGES CONTINUED SUPPORT FOR OCETA The Commission found that the Ontario Centre for Environmental Technology Advancement (OCETA) is being supported well by both the federal and Ontario governments. It reported that, "OCETA signed contracts with 56 client environmental companies, creating 190 new jobs, and generating $18.8 million in new economic activity." OCETA works closely with the MOE's Green Industry Office. The Environmental Commissioner encouraged continued financial support for the Centre after its funding runs out in 1999. OCETA website at� <http://www.oceta.on.ca/>http://www.oceta.on.ca/ ******************************************************************* ONTARIO'S MINISTRY OF TRADE NEEDS TO DO MORE FOR ENVIRONMENT INDUSTRY The Ministry of Economic Development, Trade & Tourism (MEDTT) has worked side by side with MOE's Green Industry Office on export trade promotion of Ontario's environment industry. However, MEDTT is blind to the environment industry sector in many of the ministry's functions, says the Commissioner. The Commissioner found that there was, "no mention of green industry in MEDTT's business plans" in the last two years. It, "has seen no evidence that the MEDTT has measurable targets related to green industry." It further found that, "MEDTT staff have little or no training on environmental matters, nor do they track environmental issues or referrals. MEDTT does not consider this to be part of the economic development role of its regional staff in Ontario". MEDTT website� <http://www.ontariocanada.com/>http://www.ontariocanada.com/ ********************************************************************* NEW $500 MILLION ONTARIO R & D TECHNOLOGY FUND SQUEEZES OUT ENVIRONMENT The new Ontario Ministry of Energy, Science and Technology (MEST) has been given direct responsibility for administering the new $500 million "Ontario Research and Development Challenge Fund" over the next 10 years. The fund is "designed to create alliances and collaboration between the private and public sectors to promote research excellence in Ontario while benefitting industries and stimulating high value jobs in the future." The fund is designed to "focus on five disciplines which include environmental sciences, engineering, mathematics, natural sciences, and health sciences." However, the Commission found that there are policy restrictions in the fund that makes it virtually impossible to support research and demonstration of new environmental business technologies. The first flaw in the R & D Fund is that it is allocated only for advanced research at the bench scale, not to new emerging applicable technologies. Secondly, the Commission found that the Ministry of Environment and the Ministry of Natural Resources have been left off the selection committee of ministries responsible for assessing proposals. Worse, the Commission reported that, "in the first year of the Fund, 31 projects were funded� .... but there was no funding for environmental research." Check out the MEST website at <http://www.est.gov.on.ca/>http://www.est.gov.on.ca/ ************************************************************************** ONTARIO CLIMATE CHANGE PROGRAMS FALL SHORT Ontario's climate change program to help Canada meet its commitment to the Kyoto Protocol reductions of greenhouse gases, does not have the substance to drive substantial reductions in the province. The Commission reported that, "the review of Ontario's progress on climate change has found that provincial ministries have not done the analyses necessary to support their assumptions about the ability of their programs to deliver reductions in greenhouse gases. The Commission also found that ministries do not have plans for consulting the public and that only limited staff resources have been assigned to the problems of climate change." ***************************************************************** AS NUCLEAR POWER IS SHUTDOWN, ONTARIO'S GREENHOUSE GAS EMISSIONS GO UP The Commission expressed concern that the CANDU nuclear power plants have been suffering unexpected breakdowns and expensive repairs, forcing Ontario to switch back over to coalfired electricity. The Commission reported that, "nuclear power, long an important component of Ontario's energy mix, supplied more than 60% of the energy generated by Ontario Hydro in 1994, and fossil fuels supplied a mere 10%. But today, the mix has changed dramatically. Half of Ontario's nuclear capacity is now shut down, and in 1998 close to 25% of Ontario Hydro's production was coalfired. This has caused both and increase in Ontario's overall GHG emissions and a shift in the source of the emissions." "Although Ontario's GHG emissions held more or less steady between 1990 and 1995, they are projected to rise by about 12% between 1995 and 2010. In fact, the federal government projected such a rise even before Ontario Hydro's unexpected announcement in August 1997 that it was shutting down seven nuclear reactors and shifting to more burning of fossil fuels", reports the Commission. It reminds us that, "Ontario produced nearly 30% of Canada's GHG emission in 1995, almost as much as Alberta, and far more than any of the rest of the provinces." Ontario Hydro website� <http://www.hydro.on.ca/ontariohydro.html>http://www.hydro.on.ca/ontariohydr o.html ***************************************************************** ONTARIO'S EMISSIONS TRADING PROGRAM "PERT" IS WEAK The Commission found that the new experimental "Pilot Emissions Reduction Trading" (PERT) program lacks transparency and lacks accountability measures such as an accurate inventory of emissions, an agreed upon cap on total emissions for a given locality and lacks the institutional ability to verify reduction rates. PERT focuses primarily on those pollutants that cause smog including NOX, SOX, and CO2. Members of PERT include Ontario Hydro, Consumers Gas, Detroit Edison, DOFASCO, Stelco, Shell Chemical, and Union Gas. PERT emission reduction credits are created when a source reduces its emissions below either the actual emission level, or the level required by regulation, which ever is lower. Credits must be real, surplus, quantifiable, and verifiable. Website for PERT is <http://www.pert.org/>http://www.pert.org/ ******************************************************************* KEY FACTORS FOR MAKING EMISSIONS TRADING WORK The Commission, in reviewing PERT, made a number of recommendations for successful emissions trading programs. In addition, to the need for transparency and accountability, the Commission recommended that, "the emissions cap must be set at a level below actual emissions at the beginning of the program". It recommended that emissions trading programs need to, "include effective monitoring and enforcement components." It recommended the need for "appropriate monitoring and enforcement systems that can ensure effective compliance." The Commission cautioned that there may not be value in counting emissions reductions as credits in trading programs, reductions that were caused by incidents and accidents not caused by specific efforts to reduce emissions below the cap. The Commission said that, "for example, the economic collapse of the former Soviet Republics means that" reductions "are expected to be 150 million tons below the GHG limits each year during the 2008 to 2012 Kyoto commitment period. The Kyoto agreement allows them to trade these credits even though they would never have been emitted." See the IEAA trading emissions newsletter at website <http://www.ecn.nl/unit_bs/etsap/newslet>http://www.ecn.nl/unit_bs/etsap/ne wslet/ ***************************************************************** ONTARIO FALLING BEHIND IN ENERGY EFFICIENCY The Commission reported that, "the Ontario government missed an opportunity to promote better energy efficiency standards and help to achieve Ontario government commitments to reduce greenhouse gases emissions." The Commission worried that, "Ontario was once considered a North American leader in energy efficiency standards. Now Ontario is about two years behind the U.S. in implementing stricter efficiency standards in some areas such as refrigeration technology." These comments were issued in response to Ontario's approval of a new Regulation 32698 amending O. Reg. 82/95 made under the Energy Efficiency Act. It found that this new regulation fell far short in initiatives required to strengthen Ontario's energy efficiency efforts. ������� ************************************************************ ***************************************************************************** ������������ $180.90 ANNUAL SUBSCRIPTION TO ����������� THE GALLON ENVIRONMENT LETTER Subscribe to "The Gallon Environment Letter". The 8 to 10 page newsletter is loaded with up to date business and policy information that your company, government agency, or organization can use immediately. It is provided twice a month. It is also accompanied by the "Green Jobs Available Report" that is sent to you once a month. Subscribe now. Send a cheque for $180.90 a year ($169.00+ $11.90 GST) and help finance the research that delivers inside information and breaking news on environment business in Canada and the world. Make your cheque out to, "Gallon Letter", 506 Victoria Ave., Montreal, Quebec, H3Y 2R5. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx ���� Copyright (c) 1999 Canadian Institute for ����� Business and the Environment, Montreal ������������� All rights reserved. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
