Canada Publishes NOI on the Labeling of Toxic Substances in Products, Including Toxic Flame Retardants

On October 29, 2022, Canada published in the Canada Gazette a notice of intent (NOI) announcing that it intends to propose actions under the Canadian Environmental Protection Act, 1999 (CEPA) to require the labeling of certain substances that are listed on the CEPA Schedule 1 List of Toxic Substances in certain products, such as cosmetics, cleaning products, and flame retardants in upholstered furniture. Comments and feedback on the NOI will inform a strategy on labeling and supply chain transparency for substances in products. Comments on the NOI are due January 12, 2023.

Background

Environment and Climate Change Canada and Health Canada regulate the packaging and labeling of various products containing substances listed on CEPA Schedule 1. The NOI notes that in 2017, the Standing Committee on Environment and Sustainable Development published a report on strengthening CEPA. Among other things, the report stated that there is a need to improve Canadians’ awareness of hazardous chemicals. In particular, the report recommended mandatory labeling and greater transparency under CEPA for toxic substances in products.

The NOI states that in recognition of this goal, Bill S-5, “An Act to amend the Canadian Environmental Protection Act, 1999, to make related amendments to the Food and Drugs Act and to repeal the Perfluorooctane Sulfonate Virtual Elimination Act,” proposes to include in CEPA’s preamble a statement recognizing the importance of Canadians having information about the risks posed by toxic substances to the environment or human health, including through the labeling of products. It also recognizes the importance of protecting Canadians and the environment, including vulnerable populations, from cumulative risks posed by multiple substances. Bill S-5 would also require consideration of these elements in the development of the Plan of Chemicals Management Priorities and in assessing the risks of substances. Bill S-5 was passed by the Senate on June 22, 2022, and its second reading in the House of Commons is in progress. More information on Bill S-5 is available in our February 22, 2022, memorandum.

Labeling of Toxic Substances in Products under CEPA

CEPA enables the government of Canada to develop a wide range of measures, including requiring product labeling, to protect the environment and human health from the risks posed by CEPA Schedule 1 substances. According to the NOI, Canada has used labeling requirements for a variety of purposes, such as requiring the labeling of allowable product concentrations or of instructions for product disposal. The NOI notes that there are also voluntary instruments that have labeling recommendations for household consumer products.

The NOI states that the proposed actions will leverage best practices from existing measures and will take into consideration other existing regulatory regimes related to consumer product labeling, such as the Canadian Consumer Product Safety Act.

Substances Subject to the Proposed Actions

Canada intends to propose labeling requirements for some of the substances listed on CEPA Schedule 1 in circumstances where providing information to consumers on the presence of those substances would help reduce risks to the environment or human health. The government will develop criteria to guide decision making. Criteria where labeling of substances listed on CEPA Schedule 1 would be required may include:

• The substance could be associated with potential concerns to the environment or human health at any stage of its life cycle;
   
• Labeling can help in achieving the risk management objective;
   
• The substance is subject to a phase-down, and will continue to be found in products for a period of time before being fully restricted or eliminated;
   
• There are substance concentration limits for products; and
   
• There is a need to provide disposal guidance that relates to the presence of the substance.
   

According to the NOI, criteria indicating where labeling of substances listed on Schedule 1 of the Act would not be required may include:

• When a toxic substance is entirely prohibited in products under regulations under a federal law;
   
• When another federal act is best placed to manage the risks identified for a toxic substance; and
   
• When a substance is considered toxic under CEPA but would not pose environmental or human health risks when contained in a certain product or when the product is disposed of (e.g., carbon dioxide in soda and other beverages).
   

The NOI states that consideration will be given to requiring labeling for substances in groups or classes of substances that have characteristics of concern. For example, flame retardants are a diverse group of substances associated with environmental and human health concerns. Chemical flame retardants are added to some manufactured materials, such as plastics, foams, rubbers, textiles, and surface finishes and coatings for a common purpose: to slow ignition, and the spread of fire. Canada has assessed 34 substances under its Chemicals Management Plan (CMP), 14 of which have been found to be harmful to the environment and/or human health, and for which risk management measures have been implemented or are being developed. Canada is also currently assessing 14 additional flame retardant substances under CEPA, ten of which have been proposed to be harmful to the environment and/or human health and for which risk management actions will be taken should the proposed conclusions be upheld.

According to the NOI, as flame retardants continue to be assessed and managed, labeling actions would systematically be imposed on those added to CEPA Schedule 1. A summary of flame retardant assessments and management conducted under CEPA can be found online.

Labeling Format

The NOI notes that digital technology is changing the economy and society, and digital tools offer significant opportunities to modernize and simplify regulatory interactions for the benefit of all Canadians. Therefore, Canada intends to consider the applicability of consumer-facing digital mechanisms for providing information on certain toxic substances in products, in addition to traditional physical labels. Canada will also explore the most appropriate information to require on a label, for example either information on the presence of a substance, its concentration, or its quantity.

Next Steps

According to the NOI, Canada intends to publish and consult on a product labeling strategy in 2023. The NOI states that this strategy will identify specific measures, including regulatory measures, informed by stakeholder input received from this NOI and other sources, such as the national consultations on supply chain transparency and labeling. Public input on the strategy will inform any measures that the government proposes. Such proposals will include a public consultation period to inform the publication of any final measure.

Commentary

The NOI indicates that Canada intends to implement a strategy for labeling products that contain substances deemed to pose risks to the environment or human health as noted in CEPA Schedule 1. This list includes historically known substances that are currently regulated globally in a variety of mechanisms (e.g., lead, asbestos, and mercury and its compounds). It also includes substances that are commonly utilized in industrial and consumer products (e.g., plastic-manufactured items, several petroleum and refinery gases, and ammonia dissolved in water). Canada states that it does not intend to include the 163 plus items included on the list, but commentors may wish to review the list for items and provide feedback on additional labeling burden for commonly used items. In addition, Canada states that it does not intend to include labeling for items that may already be subject to other statutory labeling requirements.

Commentors should ensure that Canada specifically excludes products that are already the subject of extensive labeling requirements under other frameworks, including the Hazardous Products Regulation, the Consumer Chemicals and Containers Regulation (part of the Consumer Product Safety Act), and the Transportation of Dangerous Goods (TDG), to avoid potentially confusing or conflicting information. Canada should consider labeling that aligns with the United Nations’ (UN) Globally Harmonized System of Classification and Labelling of Chemicals (GHS), as this is an established system of hazard classification and labeling that is internationally known, and familiar to many of the companies that would be potentially impacted by the NOI. Canada proposes the potential for disclosure of ingredients. Note that many of the items on CEPA Schedule 1 are monomers that might be present in small concentrations in polymeric products that are very common (e.g., vinyl chloride, ethylene oxide, epichlorohydrin). Commentors may wish to consider potential issues with ingredient disclosure on formulated products, including how to address concentration limits as part of this discussion. The strategy appears reasonable, but without more specificity, it is difficult to ascertain the impact and burden the NOI might include on regulated parties. Active involvement now by stakeholders would avoid potentially burdensome labeling requirements in the future.