Copyright 2008, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Environmental Law, December 2008
On December 3, 2008, the City of Toronto became the first municipal jurisdiction within Canada to require businesses to disclose their release and use of chemicals. The disclosure requirement, also known as a community right to know by-law, goes into effect on January 1, 2010.
The by-law is akin to the federal National Pollutant Release Inventory, which required 8,500 businesses in 2007 to report on the emission of chemical substances in the course of business operations. However, only 3% of businesses located in Toronto are captured by the federal legislation, as the focus of that law is on large businesses releasing large amounts of chemicals. The City of Toronto by-law will affect businesses of all sizes, and will impose mandatory disclosure requirements on upwards of 5,000 to 7,000 businesses, not only for the emission, but also for the use of any of the 25 priority substances listed in the by-law. Similar disclosure requirements exist in many other jurisdictions outside of Canada, including several U.S. cities such as New York.
At present, the Toronto priority substances list is made up of those chemicals that are considered the most harmful substances frequently used by businesses, such as cadmium, formaldehyde, trichloroethylene, and vinyl chloride. The by-law establishes reporting thresholds for the use of a priority substance. Where a threshold is met, businesses are required to submit an annual report by the end of June in each year to Toronto's Medical Officer of Health, covering both the quantities of each substance released and the quantities of each substance used throughout the previous calendar year. The priority substance reporting thresholds are on the scale of a mere 100 kg per year and, in some cases, are even less. The by-law does not impose restrictions on the release of substances, instead purporting to encourage voluntary reduction through negative publicity.
According to the Toronto Board of Health, the by-law will be implemented over four years by applying the disclosure requirements to different business sectors in three phases. Phase One businesses will be required to collect chemical use and release data starting in 2010, with the first report being submitted to the City of Toronto in 2011. Phase One businesses are:
- food and beverage manufacturing;
- printing and publishing;
- chemical manufacturing;
- wood industries;
- power generation; and
- waste water treatment facilities.
Phase Two businesses must begin collecting data in 2011 and make their first report in June of 2012. Phase Two businesses are:
- chemical wholesale;
- waste management and remediation services;
- medical and diagnostic laboratories;
- dry cleaning and laundry services;
- automotive repair and maintenance; and
- funeral services.
Lastly, Phase Three businesses begin collecting data in 2012 and submit their first report in 2013. Phase Three includes all remaining businesses that fall under the umbrella of the by-law. Thus all businesses subject to the disclosure requirements must report on their use and release of priority substances by 2013. General exemptions from the disclosure requirements apply to a handful of business sectors that may use one or more of the priority substances, such as facilities engaged solely in retail sales.
The information disclosed by businesses will be made available to the public via a searchable Internet database maintained by the City of Toronto, which will also include map-based displays of chemical use and emissions. Privacy legislation may allow for withholding some information from dissemination to the public, but businesses should be aware that the by-law obliges businesses to identify confidential, proprietary, or other information that is legally exempt from disclosure. Regardless of any privacy exemption, businesses must still prepare and submit a report where the reporting threshold of a priority substance is met.
Non-compliance with the disclosure requirements is a punishable offence subject to a range of possible penalties that are capped at a maximum of C$100,000 for the third or subsequent offences. The by-law also opens businesses to potential inspections by the City of Toronto for the purpose of determining compliance.
The City of Toronto initiative comes closely on the heels of the Province of Ontario's announcement in late August 2008 that it is considering a "Toxic Reduction Strategy" that will also include new requirements for businesses to disclose and reduce their use of chemicals. Much like the City of Toronto by-law, Ontario plans to impose reporting requirements on facilities using "toxic substances" and to publicly disclose that information through the Internet. Additionally, Ontario is proposing legislation that requires facilities to formulate "toxic reduction plans", which may also be disclosed to the public. See http://www.ebr.gov.on.ca/ERS-WEB-External/displaynoticecontent.do?noticeId=MTA0MzAy&statusId=MTU1ODkz&language=en.
Toronto businesses should now be wary of the multiple jurisdictional layers of disclosure requirements attached to the use and release of chemicals. The myriad disclosure requirements will form a complicated and overlapping system that businesses will need to navigate. Unfortunately, compliance will not be a straightforward task given that the disclosure requirements from one jurisdiction to the next will vary with respect to the chemicals at issue and the thresholds for reporting.
The move by the City of Toronto may encourage other Canadian municipalities to follow suit in creating their own community right to know by-laws. For all businesses, particularly those that have facilities in multiple Ontario municipal jurisdictions, the disclosure requirements for the use and release of chemical substances are likely to become more onerous over time as more municipalities and provinces join the bandwagon to impose chemical disclosure requirements on Canadian businesses.
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