Environment Committee on June 4th, 2008

[David McGuinty, Liberal, Ottawa South, ON]

Fair enough. Thank you.

You talked about 0.5% and the voluntary standard that the producers are contemplating for July 2010.

[Margaret Kenny]

Yes.

[David McGuinty, Liberal, Ottawa South, ON]

When Loblaws' chief executive officer goes on Canadian television in English and in French and advertises Loblaws' new phosphate-free dishwasher detergent, is it phosphate-free?

[John Carey, Acting Assistant Deputy Minister, Science and Technology Branch, Department of the Environment]

Perhaps I could try to respond to that.

We're not aware of any standard by which you could claim to be phosphate-free and the basis for those claims. I think what they're really referring to is that they do not use phosphorous-containing products as detergent builders. When you build a detergent there has to be a difference in what you're basing your cleaning power on, whether it's phosphate or synthetic detergents, etc. But technically, as a chemist I can say it's very, very difficult to guarantee that an element is not present. They're naturally occurring, and they can occur at trace levels.

I'm not aware of any actually scientific rationale one could use to say something was phosphate-free. It's an operational definition. I think what they're really getting at there is that they're not using phosphorus-containing products as the basis for their detergent.

[David McGuinty, Liberal, Ottawa South, ON]

Okay.

I'll leave aside the question of advertising standards and so on and so forth. I'll leave that on the table for now.

On the WTO technical barrier issue you raised, Ms. Kenny, do you have a legal opinion? Or do we have any legal opinions from either legal services at Environment Canada or elsewhere that would help us understand whether this may be a problem going forward?

[Margaret Kenny]

Yes. Perhaps my colleague from Justice Canada could respond to that.

[Daniel Blasioli, Senior Counsel, Department of Justice]

Thanks, Margaret.

Mr. Chair, as Ms. Kenny mentioned, the WTO agreement on technical barriers to trade and the government's position that the bill's proposal to ban phosphorus content could constitute a violation under its terms.... The NAFTA obligations regarding technical regulations and standards are very similar if not identical in many instances to those set out under the TBT agreement.

Article 2.2 of this agreement is of particular relevance here. It reads in part as follows:

Members shall ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade. For this purpose, technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective...

The bill, if enacted as drafted, would constitute a technical regulation within the meaning of this agreement. In addition, the information available to us in respect of phosphorous, its sources, its effects on the environment, and actions being taking by our other jurisdictions strongly indicate that an outright ban on phosphorous content would be found to be more trade-restrictive than necessary.

[David McGuinty, Liberal, Ottawa South, ON]

More trade-restrictive than say 0.5%?

[Daniel Blasioli]

Yes.

[David McGuinty, Liberal, Ottawa South, ON]

Is 0.5% more trade-restrictive than 1%?

[Daniel Blasioli]

With all due respect, that's not the issue we're dealing with, Mr. Chair. The fact that other jurisdictions do right now adequately, or in their view adequately, address phosphorous with 0.5%, Canada taking measures going to 0% would constitute the problem.

[David McGuinty, Liberal, Ottawa South, ON]

If we enacted the bill based on 0%—let's theorize that it received royal assent—what would be the remedies open then to challenge this legislation?

[Daniel Blasioli]

As counsel, we always hate to theorize, but I'll try to give you something in response. I'll of course limit the remarks to legal consequences.

A violation may engage one or both of the dispute settlement processes in the event of a challenge.

[David McGuinty, Liberal, Ottawa South, ON]

It would have to be invoked by whom?

[Daniel Blasioli]

There are two: investor and state dispute processes, as well as state-to-state. Under the state-to-state process, a party country challenges the measure it alleges is inconsistent with the applicable trade rules. If the panel finds that a violation has occurred, Canada would have to bring its laws into compliance, or the affected party may ultimately suspend benefits provided to Canada by the applicable agreement--for example, raising tariffs or eliminating reductions in tariffs.

The second process I mentioned is investor and state. In this situation an investor brings a claim for damages resulting from the measure it alleges is inconsistent with the applicable rules. In this instance, a trade panel decision is binding and it may award damages and applicable interest and restitution of property. Of course these can be quite detrimental to Canadian industry.

[David McGuinty, Liberal, Ottawa South, ON]

Ms. Kenny, you spoke earlier about phosphates and developing national standards. I understood that this would have an effect on Canadian standards for waste water treatment. Do we know, does Environment Canada know, does the federal government know how many waste water systems today, presently, status quo, can or cannot remove phosphates from the waste water?

[Margaret Kenny]

We have pretty good information on that matter. It's a question of moving to a secondary treatment for municipal waste water, which is in line with what this national standard would be proposing. This secondary treatment would probably allow us to reduce phosphorous entering into the municipal waste-water stream by about 40%.

There are situations where there may be—

[David McGuinty, Liberal, Ottawa South, ON]

Excuse me. Would that be a 40% reduction if all waste-water systems in Canada were at a secondary level?

[Margaret Kenny]

I meant that 40% of the phosphorous coming into the system would be removed through secondary treatment. If there were an augmentation, even beyond the secondary treatment, then there are ways to reduce the amount of phosphorous in the effluent leaving the plant by up to 90%.

[David McGuinty, Liberal, Ottawa South, ON]

So you're telling Canadians that we have the know-how and the engineering capability to remove phosphates from waste water before it is returned, usually to surface water. Is that right? We have the shrink-wrapped ability and technology already on the shelf. We can—

[Margaret Kenny]

There are technologies that will go a long way toward doing that, yes.

[John Carey]

Secondary treatment is a general term, and there are many ways to accomplish it. What you're hearing is an average. In fact, depending on how you do it, how well run the plant is, and how you monitor it, you may get higher than 40%. You may get as much as 60%.

Then you can add on what's known as biological phosphorous removal processes. These are common in some sensitive watersheds in Europe, and they could get you up to 90% removal. It wouldn't completely remove it, but 90% removal can be achieved and is being achieved in some plants. It is required in some plants in Europe.

[David McGuinty, Liberal, Ottawa South, ON]

Finally, do you have any idea what the cost would be across Canada to achieve a 40% reduction in secondary levels of water treatment?

[John Carey]

I don't have those figures, but we have analyses that could shed some light on the question. It's certainly in the billions.

[David McGuinty, Liberal, Ottawa South, ON]

It's in the billions. Thank you.