By way of background, the legislative power to regulate environmental matters in Canada is distributed among various levels of government. The regulation of plastics and waste are considered an issue of shared jurisdiction across federal, provincial/territorial, and municipal levels of government. This overlap can create uncertainty in terms of which level of government is responsible for the regulation of businesses operating in this area and sometimes results in compliance obligations at multiple levels of government.
For example, while the Canadian federal government regulates toxic substances and matters involving competition (including greenwashing), provincial and territorial legislation addresses issues such as waste management, contaminant emissions to the environment, and the management of hazardous materials in the normal course of business operations. Provincial/territorial legislation also provides certain environmental regulatory authority to municipalities, who in turn may regulate certain environmental matters at a local level.
As discussed below, Canada’s current and proposed regulation of plastics, which include single-use plastic bans, a labeling scheme for plastic products, recyclable content requirements, a federal plastics registry, and extended producer responsibility (EPR) and waste management initiatives across the country, all may be relevant to those businesses with operations in Canada or doing business with Canadians.
Single-Use Plastics
Canada in recent years has made single-use plastic waste reduction a priority, starting with a Canada-wide Strategy on Zero Plastic Waste aimed to address plastic pollution in Canada by 2030. Can. Council of Ministers of the Env’t, Strategy on Zero Plastic Waste (Nov. 23, 2018).
In line with this strategy, on October 7, 2020, the Minister of Environment and Climate Change (Environment Canada) announced Canada’s next steps towards achieving a plastic waste–free Canada, including banning certain single-use plastics by the end of 2021. This effort was based on a discussion paper issued by Environment Canada and a scientific assessment conducted by Environment Canada and Health Canada. Env’t & Climate Change Can., A Proposed Integrated Management Approach to Plastic Products to Prevent Waste and Pollution: Discussion Paper (Octo. 2020) (Discussion Paper); Env’t Can. & Health Can., Science Assessment of Plastic Pollution (Oct. 2020) (Science Assessment).
The Discussion Paper outlines the federal government’s management framework for single-use plastics and establishes a three-step process for identifying which single-use plastics should be banned or restricted. This process includes characterizing the single-use plastic as being environmentally problematic, value-recovery problematic, or both; setting management objectives; and choosing the appropriate instrument to achieve those objectives. Discussion Paper, supra, at 6, 8–9. For a ban to be warranted under this process, a single-use plastic must first be considered both environmentally problematic and value-recovery problematic. Id. at 11. The Science Assessment evaluated the scientific evidence concerning plastic pollution and its impact on the environment and human health, estimating that 1% of all plastic waste in Canada enters the environment. This means that in 2016 alone, 29,000 tons of plastic pollution entered the environment in Canada. Plastics entering the environment have been shown to cause physical harm to both ecosystems and the animals in them, including humans. Considering these ill effects, the Science Assessment recommended that Canada take steps to reduce plastic waste.
On April 23, 2021, the Canadian federal government published an order adding “plastic manufactured items” to the list of toxic substances under Schedule 1 of the Canadian Environmental Protection Act, 1999, Canada’s primary federal environmental statute. S.C. 1999, c. 33 (CEPA). This order immediately provided Environment Canada with broad authority to take risk management actions to mitigate any adverse environmental effects of plastics. Order Adding a Toxic Substance to Schedule 1 to the Canadian Environmental Protection Act, 1999, SOR/2021-86 (Order).
The Order defines “plastic manufactured items” as “any items made of plastic formed into a specific physical shape or design during manufacture, and have, for their intended use, a function or functions dependent in whole or in part on their shape or design.” According to the Order, “these items can include final products as well as components of products.”
As of December 2023, Environment Canada has identified six single-use plastic items that meet its criteria for restrictions or a ban: (1) plastic checkout bags, (2) beverage stir sticks, (3) six-pack rings, (4) cutlery, (5) straws, and (6) food packaging and service ware made from “problematic plastics” as defined in the Discussion Paper. Environment Canada also identified two categories of exemption considerations: products performing an essential function, such as accessibility, health and safety, or security functions; or products for which no viable alternatives exist, where, for example, there is no available product that is able to serve the same function. Under Environment Canada’s single-use plastic management framework, the list of banned single-use plastics is anticipated to grow over time.
On June 20, 2022, Canada enacted the Single-use Plastics Prohibition Regulations under CEPA, which came into effect on December 20, 2022, referenced as SOR/2022-138 (SUP Regulations). The SUP Regulations prohibit or restrict the manufacture, import, and sale of the six categories of single-use plastic items identified above that are made entirely or in part from plastic.
While there is a common understanding of checkout bags, cutlery, straws, ring carriers, and stir sticks, the category of food service ware may include a wider variety of items. Therefore, the SUP Regulations define food service ware as products used for serving or transporting prepared food or drinks, including clamshell containers, lidded containers, cartons, cups, plates, and bowls made from extruded or expanded polystyrene foam, polyvinyl chloride, or oxo-degradable plastics, or if they contain the additive “carbon black,” resulting in the remainder of plastic food service ware in Canada not being subject to the ban. SUP Regulations, sec. 1.
The prohibitions under the SUP Regulations are implemented on a staggered time line from December 20, 2022, to December 20, 2025, with different dates applicable depending on the item and certain commercial activity. For example, checkout bags, cutlery, straws, and food service ware cannot be sold in Canada as of December 20, 2023, while ring carriers and flexible straws packaged with beverage containers cannot be sold after June 20, 2024. The manufacture and sale for export of all of these items is prohibited as of December 20, 2025. Env’t & Climate Change Can., Single-use Plastics Prohibition Regulations—Overview.
To help businesses adapt to the proposed requirements, Environment Canada has developed a guidance document for selecting alternative products and technical guidelines to assist businesses subject to the Regulations. See Env’t Can., Guidance for Selecting Alternatives to Single-use Plastics as Defined in the Single-use Plastics Prohibition Regulations (June 20, 2022) (Guidance); Env’t & Climate Change Can., Single-use Plastics Prohibition Regulations—Technical Guidelines (June 20, 2022). The Guidance outlines important considerations for businesses when assessing alternative products to transition to a circular economy. For example, the federal government recommends aluminum, paper and molded fiber, wood, and, in limited instances, recyclable plastics as alternative materials that are readily available in the market. In terms of opportunities, these prohibitions could benefit U.S. manufacturers of alternative products required by businesses operating in Canada to replace their current single-use products subject to the ban. For example, a report commissioned by the Department of Natural Resources suggested that additional demand for single-use paper checkout bags could be met by imports from the United States as well as domestic production capacity. See Single-Use Plastics Prohibition Regulations, Regulatory Impact Analysis Statement, (2021) C. Gaz. I, 6177.
While most of the headlines in Canadian media are focused on the bans at the federal level, regulation of single-use plastics is also occurring at the Canadian provincial/territorial and municipal levels. For example, British Columbia’s Single-Use and Plastic Waste Prevention Regulation, B.C. Reg. 186/2023, effective December 20, 2023, instituted a province-wide ban on the sale, distribution, or use of a wide category of “single- use products.” These regulations target various single-use and hard-to-recycle plastics, including plastic bags, drinking straws, utensils, and stir sticks, as well as problematic plastic food service packaging and all oxo-degradable plastic packaging. The regulations are noteworthy because they not only go well beyond the scope of the federal single-use plastics ban, but they are also focused on curbing the overall usage of disposable food service accessories in the province. For example, this includes restrictions such as making certain items like beverage cup lids available to customers by request only, thus encouraging more sustainable practices in consumers’ daily lives.
The Yukon, the Northwest Territories, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island all have various bans and/or programs related to the distribution of single-use plastics and/or single-use products. While Québec, Saskatchewan, Nunavut, and the Northwest Territories have no provincial/territorial legislation banning single-use plastic products, some municipalities in these provinces and territories have adopted by-laws banning or restricting the use or distribution of some single-use plastics, in most cases single-use plastic checkout bags.
Labeling of Plastics Materials—Recyclability and Compostability
Although the ban on single-use plastics has received the most attention with respect to Environment Canada’s plastics-related announcements, Canada’s plans for plastic include more than just a ban. Canada is also taking measures to improve the way it manages plastic waste through prevention, collection, and innovation. The federal government has stated that it believes by investing in innovative waste management solutions, Canadians can cut back on their greenhouse gas emissions by 1.8 million tons per year, while at the same time creating 42,000 jobs for Canadians. Press Release, Env’t & Climate Change Can., Canada One-step Closer to Zero Plastic Waste by 2030 (Oct. 7, 2020).
One of these initiatives focuses on the creation of labeling rules to enhance the accuracy of recyclability and compostability information on plastic packaging. This effort is currently in the consultation phase.
The widely used “chasing arrows” symbol (), which is also known as the Mobius loop, is used to communicate to consumers that a product is made of recycled content or is recyclable. Env’t & Climate Change Can., Consultation Paper: Towards Canada-wide Rules to Strengthen Recycling and Composting of Plastics Through Accurate Labeling, at 12 (July 2020) (Plastics Labeling Consultation Paper). The Plastics Labeling Consultation Paper provides for a labeling regime that would ban the use of this symbol on plastic items unless at least 80% of recycling facilities in Canada would accept and have reliable end markets for those items. Furthermore, this proposal would introduce rules governing the use of common (and often inaccurate) terms in the labeling of plastic packaging such as “compostable,” “degradable,” and “biodegradable.” Specifically, this paper provides that the use of the terms “degradable” and “biodegradable” would be entirely prohibited and the use of the term “compostable” would be limited to products that meet the government’s designated compostable standard supported by laboratory results. Id. at 4.
Under the proposed labeling regime, producers of consumer-facing primary and secondary plastic packaging, as well as single-use plastic products (including those manufactured in or distributed from the United States) would be required to assess their plastic products to determine whether they can be recycled and label them as either recyclable or not recyclable or identify which components of a product or in what region it is recyclable. Recyclability would be evaluated according to whether the plastic item (a) is accepted in public recycling systems that at least 80% of the population in one or more of five Canadian regions can access and (b) can be organized into bales (e.g., bundles or packages of plastics items) that attract a stable, positive price in a reliable end market in North America, meaning high enough prices that contribute to successful recycling outcomes.
In addition, the Plastics Labeling Consultation Paper would require producers of plastics products to select a compliance mechanism to assess the recyclability of their products such as a third-party labeling program, a calculator, or a guideline, and the recyclability label on the item would reflect the results of such evaluation to ensure transparency for consumers. Id. at 32–33.
Recyclable Content Standards
Another initiative of the Canadian federal government to reduce plastic waste is focused on recyclable content standards. According to the Discussion Paper, the current recycling technology available in Canada cannot keep up with the proliferation of new types of plastics. To address this challenge, the federal government is considering how product standards for single-use plastics can help engender a consistent and growing market for producers of recycled plastics. The government proposes to include regulations under CEPA to require minimum levels of recycled content in plastic products and packaging. Additionally, these regulations are expected to establish technical guidelines and other tools to help companies meet requirements and minimum standards.
To increase recycling and reduce the amount of single-use plastics sent to landfills, Environment Canada plans to work alongside the provinces and territories to develop consistent standards that will hold companies that manufacture plastic products or sell goods with plastic packaging responsible for collection and recycling efforts across the country. Notably, this will most certainly apply to American companies selling their manufactured plastic products or goods with plastic packaging in Canada.
As discussed below, some of provinces and territories have already taken steps to implement or update their recycling regimes to reduce plastic waste. How the provincial and territorial governments will respond to these overtures by the federal government is not yet known.
Canadian Federal Plastics Registry
Another major initiative of the Canadian government to regulate plastics is the creation of a federal plastics registry, which would require producers who supply plastic products to Canada to register and report on these plastics for government data collection and study purposes, including with respect to their supply into the market; their collection for diversion; their reuse, recycle, repair, remanufacture, and refurbishment; and their importation and exportation. This registry would support Canada’s EPR policy, which aims to improve waste reduction and recycling activities by extending a producer’s physical and financial responsibility for a product to the post-consumer stage of its life cycle (e.g., the end of the product’s useful life when it becomes waste). Env’t & Climate Change Can., Consultation Paper: A Proposed Federal Plastics Registry for Producers of Plastic Products, at 4, 12 (2019) (Federal Plastics Registry Consultation Paper).
The producers required to report under this regime will align with the defined obligated producers under the provincial/territorial stewardship and EPR models discussed below, which capture manufacturers, first importers, distributors, and retailers with a footprint in Canada who supply plastic products in the Canadian economy. The specific party in the supply chain considered a producer will vary depending on which provincial or territorial regime is engaged, but it typically will be the “brand owner” of the product with some residency in Canada (i.e., the entity that owns/leases property, business operations, employees, etc. in Canada). The producer may in many instances include a U.S. company or its Canadian affiliate, subsidiary, or parent.
The categories of products that would be subject to reporting requirements under the proposed federal registry include packaging, with subcategories for beverage containers and single-use plastics; construction plastics; automotive plastics; electronics and electrical equipment; textiles, which encompasses clothing, interior textiles, and footwear; major appliances such as ovens and fridges; and agricultural film. Id. at 9.
The Canadian government is aiming for a phased implementation of the federal registry with Phase 1 slated to begin June 1, 2025, which would require producers already subject to EPR programs in provincial and territorial jurisdictions to report on the plastics they placed in the market for packaging and electronics. Reporting obligations for producers of the other categories of plastic products noted above will follow in Phases 2, 3, and 4, between 2026 and 2028. Id. at 19–20.
Provincial and Municipal EPR and Waste Management Initiatives
Most waste management activities fall under provincial/territorial jurisdiction and are generally considered matters of a local nature. For this reason, there are a number of provincial/territorial efforts underway to address plastic waste within their respective jurisdictions. Some provinces and territories have already begun the process of changing their recycling regimes as they relate to single-use plastic items to be compatible with the laws and proposed regimes at the federal level. These plastic products fall into a larger category of paper and packaging products known as “PPP” or “Blue Box” materials that are generally regulated together under these regimes.
For example, Ontario is currently transitioning from a more traditional stewardship program, which requires annual reporting of PPP supplied into the province and payment of commensurate fees to support municipal recycling systems, to an EPR model. The EPR model requires producers to directly fund a new collection, management, recycling, and disposal system for these PPP, thereby shifting such responsibility from the municipalities (and therefore the taxpayers) to the producers themselves. This transition began in July 2023 and will be complete by the end of 2025. Importantly, producers are able to enter into an agreement with a producer responsibility organization that is regulated and permitted to run the collection and recycling system on behalf of the obligated producers. O. Reg. 391/21.
In Alberta, the government recently passed the Environmental Protection and Enhancement Amendment Act, S.A. 2021, c.21, to enable the creation of an EPR program in the province and reduce the province’s landfill waste. The amendment is intended to set the foundation for a provincial framework that holds manufacturers responsible for recycling their products and developing a circular economy. In particular, the amendment allows for more flexibility in the types of materials included under or exempted from the provincial recycling programs and facilitates the development of producer-run material collection and recovery programs. Further, the amendment allows the government to draft regulations that exempt specified recyclable materials from other provincial legislation if certain conditions exist, such as exemptions based on designated materials, activities, or industry classification.
Several other jurisdictions, including British Columbia and New Brunswick, also have an EPR model for PPP in effect, while others, such as Manitoba, Québec, and Saskatchewan, have plans in place to transition their current PPP payment model stewardship program to an EPR model. Newfoundland and Labrador have also proposed an EPR program for PPP.
Challenges and Opportunities for U.S. Companies Amid Increasing Plastic Regulation in Canada
Companies doing business in Canada or with Canadians involving plastic products should consider whether any of their products are subject to existing, proposed, or future bans in Canada as well as products targeted for additional regulation through stewardship, labeling, or reporting requirements. A proactive approach to compliance with Canadian laws is the key to ensuring American businesses are not caught by surprise as additional regulation of plastic materials is implemented in Canada.
While the full scope and impact of Canadian plastic bans and regulation on U.S. manufacturers, distributors, and retailers who supply plastic products or components into Canada remain to be seen, the trend of increasing regulation of plastic products is well underway. Canada’s recent agreement with 174 other countries to the first global plastic pollution treaty confirms Canada’s intention to remain aligned in the control and reduction of plastic waste with its counterparts on a global scale. The consultation and transition periods discussed above present an opportunity for American businesses to update their plans in connection with the Canadian market and, in some instances, use the opportunity to proactively prepare or even financially gain from this shift in the management and regulation of plastics in the Canadian economy.
