Solid Waste & Recycling

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Red Tape and the Transboundary Business

The transboundary movement of municipal and industrial, commercial, and institutional (IC&I) waste is about to become further entangled by more red tape and fees. Bill C-32 will soon replace the exist...


The transboundary movement of municipal and industrial, commercial, and institutional (IC&I) waste is about to become further entangled by more red tape and fees. Bill C-32 will soon replace the existing Canadian Environmental Protection Act (CEPA), likely by the end of 1998. C-32 proposes to expand the powers of the federal government, not the least of which are broad powers to control, prohibit, and tax the transportation or movement of a wide range of hazardous wastes, recyclable materials, and other wastes.

Those engaged in the movement of hazardous waste are familiar with the 1986 Canada-U.S. Agreement on the Transboundary Movement of Hazardous Waste. The agreement has led to a permit system for moving hazardous waste between Canada and the United States. By some accounts, this system is mainly a paper-pushing requirement for a small proportion of business. There is little concern about the ability to move the waste once the paperwork has been completed. This will change with Bill C-32.

Minister’s discretion

No person or company will be able to import, export, or convey hazardous waste, hazardous recycled material, or other wastes yet to be prescribed (including municipal solid waste) except after: notifying the minister; paying a fee to be prescribed; or, after receiving a permit from the minister which must either provide an authorization from the receiving jurisdiction (e.g., a U.S. state) or the minister’s authorization.

The minister may refuse to issue a permit if, in the minister’s sole opinion, the environment and human health will not be protected against adverse effects. As many landfills leak or create undesired nuisances, this provision leaves the door open for the minister to interfere with the flow of waste from generators to their chosen disposal sites. A regulation (as yet unknown) will provide guidance on this issue. The regulation may be the only practical constraint on the minister’s discretion.

The impact of political intervention and ministerial power was capably demonstrated by Sheila Copps when she was the federal minister of environment. Ms. Copps unilaterally shut down the border to the movement of PCBs. She did so with no apparent legal authority, and against the advice of her staff. To many critics, Ms. Copps’ actions appeared to be motivated by protecting select business interests, rather than the environment. The Bill enshrines the potential for ministerial intervention in the market place, albeit under the guise of environmental protection.

Significant uncertainty will be caused for long-term cross-border disposal contracts, at least until the federal government’s intentions regarding municipal waste is clear. For example, the City of Toronto will issue a Request for Proposal for the long-term disposal of municipal waste (likely for a 20-year period). The city will have less confidence in its ability to rely on a U.S. disposal site. Export options will be exposed to increased political scrutiny and possible environmentalist or NIMBY pressure, in an attempt to persuade the minister to “protect the environment” and stop the flow of waste to the chosen disposal site.

Flow control

The ability to stop or restrict waste at the border also raises the specter of flow control, whereby government intervenes in the market to influence or direct the movement, treatment, and disposal of waste based on economics or political considerations.

This is a very contentious issue for industry in the U.S., where various states and municipalities have enacted import/export bans, special levies, and waste hauler restrictions. The U.S. Supreme Court has struck down both state and municipal flow control laws. Legislative proposals have been brought before the U.S. Congress which would have allowed state and local flow control, but such proposals have died. There is still considerable political pressure to allow such local control over waste and industry continues to fight it at every turn.

Some argue that flow control is good for local industry and the environment. Such measures can re-direct waste and recyclable materials to domestic facilities, thereby retaining local jobs and dollars. For example, some industry people estimate that between 5 to 10-million dollars worth of transportation and disposal business is lost to the U.S. each month from Ontario alone.

Others argue that waste is a commodity and a resource that should flow wherever disposal or recycling markets dictate. Disposal standards and environmental protection are, in the eyes of some, equally strong on both sides of the border. If existing local, provincial, state, and federal laws already achieve environmental protection, there is no need for a further level of regulation, or for restriction on the import or export of waste.

Will the provisions of C-32 permit government intervention in the transboundary market place? Unquestionably, the answer is yes. Will C-32 lead to project-specific or industry-wide restrictions on movement, which de facto influence the flow of waste? Possibly. For industry and customers alike, the transboundary business will only become less certain.

Written by Robert G. Power, LL.B., legal counsel at the law firm Outerbridge, Miller, Sefton, Willms & Shier in Toronto, Ontario.


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