Thank you, Madam Chair.
Thank you, esteemed members of the committee. It's a great opportunity to be here to speak with you today and also to meet many of you. Before these hearings started, I think almost every member of the committee I met, almost without fail—I think there might have been one—was saying to me, we're all interested to know why the Retail Council of Canada is here and what their interest is in CEPA.
I'm here to answer that question. It has to do with the chemicals management plan and the reporting on chemicals as they appear in finished consumer products. Before I go there, I will give a quick introduction to the Retail Council of Canada, or the RCC, for those of you who aren't familiar with us.
The RCC has been the voice of retail in Canada since 1963.
In the private sector, the retail industry is the largest employer in Canada. Over 2 million Canadians work in our industry. It is estimated that our industry generated over $59 billion in salaries and $340 billion in sales in 2015. Moreover, these figures exclude the sale of vehicles and fuel. Members of the Retail Council of Canada, or the RCC, account for more than two-thirds of retail sales in Canada.
The RCC is a not-for-profit, industry-funded association. It represents small, medium and large retailers in all communities, right across Canada.
Recognized as the voice of retailers in Canada, the RCC represents more than 45,000 store fronts of all retail formats, including department, grocery, speciality, discount, and independent stores, and online merchants.
The Retail Council of Canada and its members are strong supporters of the Canadian Environmental Protection Act, otherwise known as CEPA.
The act establishes pollution prevention as a cornerstone of national measures to reduce toxic substances in the environment. It also offers a wide range of tools to manage toxic substances, other sources of pollution, and waste. Finally, it encourages greater public and industry participation in decision-making.
Retailers are also very supportive of the chemicals management plan under CEPA, which is widely recognized as a world-class program. The chemicals management plan, of course, as members of this committee will know, is Canada's approach to assessing and managing chemicals under CEPA.
Chemicals are an integral part of our everyday life, essential to our economy, our communities, our homes, and of course, the products we buy. While chemical substances have benefits, they may also have harmful effects to human health and the environment if they are not properly managed and depending on how they're used.
Founded in 2006 and managed by the Departments of the Environment and Health, the chemicals management plan builds on previous initiatives to protect human health and the environment by assessing chemicals used in Canada and by taking action on those chemicals found to be harmful. The chemicals management plan uses a variety of tools to gather information from businesses, including voluntary surveys, as well as non-voluntary or mandatory surveys under section 71 of the act.
The chemicals management plan originally targeted importers of chemicals, or the manufacturers of the chemicals themselves. This made sense and this approach continues to make sense. After all, if you are making a chemical, or if you're importing a chemical, you know exactly how much you are making or importing. More importantly though, this is how the bulk of chemicals are introduced into Canada.
In late 2012, though, under section 71 of the act, the section that allows for legally mandatory surveys, it was interpreted to include finished consumer products for the first time. For the first time, the act was used to require reporting on chemicals as they appeared in finished consumer goods, things like this table, the microphone, my jacket or tie, or whatever. That particular survey was requesting information on over 2,000 substances.
Retailers found themselves scrambling to determine how much of any particular substance appeared in the jackets they were selling or bracelets, or glassware, or whatever it was. It was really a brand new thing for them. Again, with the chemicals management plan, we're not talking about restricted substances here; we're talking about substances that are used every day.
As you can imagine, this came at a great expense of time, writing letters to suppliers and vendors, often overseas, trying to get at information with very little return. One of our member's estimates that two months and 160 working hours was spent writing to suppliers on the survey for over 2,000 substances.
This is because they, like many of our members who have legal counsel, were advising them that this was a mandatory survey and they had to take due diligence, and the definition of due diligence is to write to the manufacturers and suppliers.
Another member estimates that they wrote to 215 suppliers, 20 of whom responded to them, which represents a response rate of less than 10%, of which 0% was usable. In addition to that, we did a quick internal survey of 10 of our members and found that three surveys done toward the end of 2015 and the beginning of 2016 had less than a 5% response rate. This has to do, again, with the notion of due diligence and when it's a mandatory survey, having to write to all your suppliers because you don't know whether these substances are going to appear or not.
This was a lot of legal red tape, and the cost of these mandatory surveys very clearly outweighed the limited benefits. Of course, any new cost introduced to the system ultimately gets translated to higher prices for consumers, so that would contribute to the U.S.-Canada price gap and things like that, which is significant enough already.
Another approach has been taken during that time and since then. We have great working relationships with officials in the Departments of ht Environment and Health, and a couple of voluntary surveys have been conducted that have yielded better results, but at the same time retailers were able to focus their efforts on the vendors where they suspected that some of these chemicals would be found in some of their products and where they'd get better response rates, so the same retailer that spent two months and 160 working hours to write suppliers on a mandatory survey estimates that they spent five hours on a voluntary survey and were able to achieve similar amounts of information, because they were able to target their efforts.
This voluntary approach frees up time and resources and allows retailers to pursue information where it most likely resides, rather than going through the motions to satisfy legal red tape. A smaller, more manageable number of substances, perhaps four or six substances of the highest concern rather than 2,000-plus, would allow retailers to track down information on those chemicals of greatest concern. Therefore, in this particular case of finished consumer goods, less yields more and therefore provides better protection to human health and the environment.
We are suggesting that CEPA would benefit from targeted amendments to specifically exclude mandatory legal reporting on substances as they appear in finished consumer goods. Targeting manufacturers and importers of the substances themselves is what makes the most sense, not finished consumer goods. In the instances where there are substances of great concern and it's deemed necessary, the voluntary approach has already demonstrated to be more cost-effective and yield better results, and of course the Retail Council of Canada would be happy to provide this committee with suggested wording on what that amendment would look like.
I have one last comment, if I may. It's not specifically related to the act but has to do with communication around the chemicals management plan. We have found that both communication to the public and communication back to businesses could be improved upon. A lot of Canadians aren't familiar with the chemicals management plan. A lot of what is available is written in fairly technical language, so it would benefit from additional communication and more plain language. In addition to that, I can only speak on behalf of retailers, but retailers providing all this information to government and not hearing back on what that information was used for, I think that would go a long way toward building good faith with businesses so that people know what they're feeding that information into.
To conclude, RCC and its members support CEPA and the chemicals management plan. It would benefit from targeted amendments to specifically exclude mandatory legal reporting on substances as they appear in finished consumer products. The primary focus of the program must remain where accurate information is obtainable from the importers and manufacturers of chemicals themselves, and when necessary, a voluntary basis should be used for finished consumer products. This would free up resources that are currently being used on legal red tape, allowing retailers to focus limited resources on tracking down information on the substances of greatest concern.
In turn this would help keep the price of consumer goods in Canada as competitive as possible while also providing more information more quickly, thereby helping to better protect human health and the environment.