Initial Environmental Assessment of the Environmental Goods Agreement (July 2015)

Table of Contents

• 1. Executive Summary
  • 1.1 Environmental Goods Agreement
  • 1.2 Environmental Assessment of Trade Agreements
  • 1.3 Initial Environmental Assessment Findings
  • 1.4 Next steps
• 2. The Environmental Assessment
  • 2.1 Overview of the Environmental Assessment Process
  • 2.2 Scope of the Environmental Assessment Process
  • 2.3 Assessment Methodology
• 3. The Canadian Environmental Goods Industry
• 4. Trade and the Environment
  • 4.1 The Government of Canada’s Environmental Objectives in Relation to Trade
  • 4.2 The Government of Canada’s Environmental Objectives in Relation to the Environmental Goods Agreement
• 5. Initial Environmental Assessment Findings
  • 5.1 Anticipated Economic Effects of an Environmental Goods Agreement
  • 5.2 Potential Environmental Impacts and Significance
  • 5.3 Mitigation and Environmental Enhancement Measures
• 6. Environmental Sustainability Indicators
• 7. Conclusion

1. Executive Summary

1.1 Environmental Goods Agreement

After the 2012 agreement by APEC Leaders to reduce applied tariffs on a list of 54 environmental goods by 2015, interest began to build at the World Trade Organization (WTO) to find a way to re-engage in environmental goods tariff negotiations in that forum. On July 8, 2014, fourteen WTO Members, including Canada, launched the negotiation of the WTO Environmental Goods Agreement (EGA).

The EGA negotiations aim to reduce or eliminate tariffs on a broad range of environmental goods which help address environmental challenges. Tariff reductions would be granted by EGA participants on a Most-Favoured-Nation basis, meaning that all WTO members would benefit from these reductions. It is expected that a successful EGA would boost global trade in environmental goods.

1.2 Environmental Assessment of Trade Agreements

Canada believes that trade and environmental protection can, and must, be mutually supportive. In order to ensure that Canada’s environmental protection mechanisms are strengthened through free trade, Canada typically negotiates trade-related environmental provisions in the context of free trade agreements. An environmental assessment of trade negotiations assists Canadian negotiators to integrate environmental considerations into the negotiating process, and document how environmental factors are being considered in the course of the negotiations. Through the environmental assessment process, Canada seeks to ensure that proposed trade agreements contribute to the development of the Canadian economy in a sustainable manner.

The Government of Canada is committed to conducting environmental assessments of all of its trade negotiations, including those towards the EGA. The EGA would be specific to trade in goods and only would pertain to tariff elimination. No environmental provisions are being considered nor negotiated in this agreement. Nonetheless, Canada believes that the EGA would yield environmental benefits as it would promote trade in environmental goods and increase availability of such goods in Canada.

In accordance with the 2001 Framework for Conducting Environmental Assessments of Trade Negotiations^{Footnote 1} (“the Framework”), this report constitutes the Initial Environmental Assessment of the negotiations of the EGA by the Department of Foreign Affairs, Trade and Development (DFATD). According to the Framework, the primary purpose of an Initial Environmental Assessment is to scope out the main environmental issues likely to arise as a result of the implementation of the EGA. This assessment focuses on potential economic and environmental impacts in Canada stemming from the implementation of the EGA. It does not predict the specific outcomes of the EGA negotiations, but instead, estimates possible environmental impacts, using informed judgements of potential changes to economic activity resulting from the implementation of the EGA.

1.3 Initial Environmental Assessment Findings

The EGA would eliminate tariffs on a broad range of environmental goods in the participating WTO members. Also, in some sectors, availability of environmental goods in Canada would be greater due to tariff reductions and their use, including the use of the best available technologies, should increase. The elimination of tariffs on a global scale would also create greater international competition, which would foster the global technological innovation in this sector and thereby improve the quality of environmental goods available to Canadians. This would have a positive environmental impact as the use of environmental goods generally yields environmental benefits. It is not expected that the overall Canadian imports of environmental goods would significantly increase as Canadian tariffs on environmental goods are generally already low.

Canadian exports of environmental goods would be expected to increase, considering the relatively high tariffs applied by some participants, including China. It is expected that increased Canadian exports of environmental goods would lead to increased production of such goods and ultimately increased economic activity in Canada. However, the size of the Canadian industry producing the goods that could be covered by a successful EGA is small in relation to the overall Canadian economy. Therefore, any environmental impact resulting from the increased economic activity in itself is expected to be minimal and should be easily accommodated within Canada’s existing environmental regime. Once the list of products to be included in the EGA is known, a quantitative analysis will be undertaken to confirm these findings.

1.4 Next steps

A Final Environmental Assessment will be prepared after EGA negotiations conclude. This Final Environmental Assessment will identify any notable divergence from the Initial Environmental Assessment and will highlight any subsequent analysis undertaken as a result of any change in EGA negotiations. Follow-up and monitoring could, if warranted, be undertaken in order to review any mitigation or enhancement measures ultimately recommended in the Final Environmental Assessment report. Monitoring and follow-up activities can be undertaken anytime during the implementation of a concluded trade agreement in order to gauge the performance of its provisions from an environmental perspective.

2. The Environmental Assessment

2.1 Overview of the Environmental Assessment Process

The Government of Canada is committed to conduct environmental assessments for all trade negotiations using a process that requires interdepartmental coordination and public consultations. The Framework details this process, and was developed in response to the Cabinet Directive on Environmental Assessment of Policy, Plan and Program Proposals^{Footnote 2} (“the Cabinet Directive”). Detailed guidance for applying the Framework is contained in the Handbook for Conducting Environmental Assessments of Trade Negotiations^{Footnote 3} (“the Handbook”). The guidelines for implementing the Cabinet Directive require government departments to describe, in appropriate detail, the scope and nature of environmental effects, both positive and negative, that could arise from implementing proposals and how these could impact the Federal Sustainable Development Strategy’s goals and targets.

The Framework provides a process and methodology for conducting the environmental assessment of a trade negotiation. It is intentionally flexible so that it can be applied on a case-by-case basis according to the nature of the agreement being negotiated. The objectives of the environmental assessment process of a trade negotiation, as outlined in the Framework, are:

• to assist Canadian negotiators in integrating environmental considerations into the negotiating process by providing information on the environmental impacts of a proposed trade and/or investment agreement; and
• to document how environmental factors are being considered in the course of trade negotiations.

The Framework provides for three phases of assessment:

• Initial Environmental Assessment: A preliminary examination to identify possible key issues.
• Draft Environmental Assessment: If required, builds on the findings of the Initial Environmental Assessment and provides a detailed analysis of those issues.
• Final Environmental Assessment: Takes place at the conclusion of the negotiations in order to reflect how the environment was considered throughout the process.

After the conclusion of each phase, a public report is issued along with a request for comments.  In the event that an initial environmental assessment finds little likelihood of significant environmental impact occurring as a result of an agreement, a draft environmental assessment is not required. In those cases, environmental considerations continue to be integrated into ongoing discussions and a final environmental assessment must still be completed. In accordance with the Framework, a draft environmental assessment will not be undertaken for this negotiation. However, the Department will continue to receive comments from stakeholders and the public and a final environmental assessment will be released after negotiations conclude.

After the conclusion of the environmental assessment process, follow-up and monitoring may be undertaken in order to review any mitigation or enhancement measures that would be recommended in the final environmental assessment.

2.2 Scope of the Environmental Assessment Process

The purpose of the environmental assessment is to inform negotiators of the potential domestic economic and environmental impacts from a prospective EGA. The main goal of an EGA would be to reduce or eliminate tariffs on a list of environmental goods is currently under negotiation^{Footnote 4}. In this context, this Initial Environmental Assessment will only address the expected environmental impacts of any new trade that may result from tariff reduction or elimination.

The EGA is currently being negotiated by seventeen participants^{Footnote 5}. Other interested WTO Members could potentially join the EGA negotiations, or could accede after negotiations have concluded. In this context, this Initial Environmental Assessment will focus only on the current participants in the negotiations.

Any new analysis undertaken during the course of negotiations due to new or unanticipated issues, such as additional WTO Members joining the negotiations or additional trade disciplines being included in the EGA, will be documented and included in the final environmental assessment.

2.3 Assessment Methodology

The Initial Environmental Assessment is a forecasting exercise that allows for the identification of potential environmental effects resulting from trade negotiations as well as providing an opportunity to integrate environmental considerations while the negotiations are ongoing. It focuses on potential economic and environmental impacts of the EGA in Canada by exploring the links between tariff reductions, changes in trade and production, and the environmental impacts in Canada. In other words, this assessment considers the environmental impacts of new trade in Canada that may result directly from the EGA.

The Framework provides a four-stage analytical methodology. The Handbook provides guidance on how to conduct each stage of the analysis.

• Identification of the economic impacts of the agreement to be negotiated. This stage identifies the trade liberalization activity of the agreement under negotiation. It examines what the potential agreement may include, the changes or new trade activity that could result, and the overall economic relevance to Canada. This helps determine the scope of analysis for the environmental assessment and to prioritize the issues to be assessed.
• Identification of the likely environmental impacts of such changes. Once the economic impacts of the proposed trade agreement have been estimated, the likely environmental impacts of such changes are approximated. Consideration is given to potential positive and negative impacts.
• Assessment of the significance of the identified likely environmental impacts. The identified likely environmental impacts are then assessed as to their significance. The Framework outlines various criteria in determining significance, including frequency, duration, permanency, geographical scope and magnitude, level of risk, irreversibility of the impacts, and possible synergies among the impacts.
• Identification of enhancement/mitigation options to inform the negotiations. The Initial Environmental Assessment intends to identify, in a preliminary fashion, the possible policy options or actions to mitigate potential negative impacts and/or to enhance potential positive impacts that may occur as a result of the agreement.

The environmental assessment of a trade negotiation requires interdepartmental collaboration. An interdepartmental committee is established to review the environmental assessment of each trade negotiation and includes officials from government departments and agencies involved in the negotiations. This approach facilitates informed policy development and decision making throughout the negotiation process.

The environmental assessment process also includes consultations with the public, provincial and territorial governments and with the non-governmental Environmental Assessment Advisory Group (EAAG). The EAAG is made up of persons drawn from the business sector, academia and non-governmental organizations who provide advice in their own capacity on the DFATD assessment process. At the conclusion of each assessment phase (i.e. Initial, Draft and Final), environmental assessments are shared with provincial and territorial representatives and the EAAG for initial feedback before being released for public comments.

As required by the Framework, a Notice of Intent to conduct an Environmental Assessment of the EGA was published on August 30, 2014.  This notice invited interested individuals to submit their input for consideration in the drafting of the Initial Environmental Assessment by October 30, 2014. While no public comment was received during this consultation phase, three comments were sent by members of the EAAG. These comments generally highlighted the increased export opportunities that may be provided by the EGA, as well as the potential positive environmental externalities associated with the increased international diffusion of the best available technologies in the environmental goods area.

The Government welcomes input and comments on all Initial Environmental Assessments. Input can be sent to:

E-mail: EAconsultationsEE@international.gc.ca
Fax: 613-992-9392
Mail: Environmental Assessment Consultations – Environmental Goods Agreement
Trade Agreements and NAFTA Secretariat (TAS) 
Foreign Affairs, Trade and Development Canada
Lester B. Pearson Building
125 Sussex Drive, Ottawa, ON, K1A 0G2

3. The Canadian Environmental Goods Industry

The environmental goods industry does not lend itself to a precise definition. Generally, environmental goods include goods that benefit the environment through their usage. For the purpose of the Environmental Goods Agreement negotiations, environmental goods include goods used for:

• Air pollution control
• Solid and hazardous waste management
• Waste water management and water treatment
• Environmental remediation and clean-up
• Environmental monitoring, analysis and assessment
• Noise and vibration abatement
• Energy efficiency
• Clean and renewable energy
• Resource efficiency

They also include goods that are otherwise environmentally preferable. Based on the 204 subheadings of the Harmonised Commodity Description and Coding System (HS) that are included in Canada’s Preliminary List of Environmental Goods for Consultations, Canada’s exports of environmental goods are valued at over $19 billion annually^{Footnote 6}, which represents approximately 1,3 % of GDP^{Footnote 7}. Between 2007 and 2012, Canada was the 7th largest exporter and 5th largest importer of environmental goods among all EGA participants. The largest export markets for Canadian environmental goods during this period were the United States, followed by the European Union and China.

A significant subset of the environmental goods industry is the clean technology industry. The Canadian Clean Technology Industry Report 2014^{Footnote 8} (CCTIR 2014) projects that the global clean technologies market will more than double from $1.1 trillion in 2012 to $2.5 trillion by 2022. According to CCTIR 2014, the Canadian clean technology sector has developed into an $11.3 billion industry and is expected to grow significantly. In 2012, Canada’s clean technologies industry employed 41,100 people (up from 38,800 in 2011) in over 700 companies (primarily small and medium-sized enterprises) in all regions of the country. Clean technology exports account for more than half of industries revenues and it is forecast that by 2015, 70% of industry revenues will come from exports, with approximately 50% of these exports going to non-US markets.

4. Trade and the Environment

4.1 The Government of Canada’s Environmental Objectives in Relation to Trade

The Government of Canada is committed to ensuring that its trade negotiations encourage mutually supportive trade and environmental objectives. The importance of this mutually supportive relationship between trade and environmental outcomes is underscored by the strong correlation between open markets, economic development and environmental protection. A strong, rules-based trading system and efficiently regulated markets are key building blocks for economic growth and development. In addition, the reduction of trade barriers may facilitate the exchange of environmentally friendly technologies.

The identification of likely and important environmental effects of any proposed trade agreement enables negotiators to consider whether existing mechanisms (e.g., existing laws and/or regulatory frameworks) are sufficient, or whether new efforts would be required to mitigate any identified environmental impacts. The environmental assessment looks to minimize negative environmental impacts, as a result of a trade agreement, while also contributing to the economic wellbeing of Canadians.

4.2 The Government of Canada’s Environmental Objectives in Relation to the Environmental Goods Agreement

Canada considers that one of the most concrete, immediate contributions that the WTO and its Members can make towards environmental protection is to seek agreement to eliminate tariffs on goods that are associated with environmental benefits. Canada will seek an ambitious outcome to the EGA negotiations that would see tariffs being eliminated on a broad range of environmental goods.

A successful and ambitious agreement would facilitate the trade of environmental goods, reducing the cost of technologies that are crucial to face current environmental challenges. It would also stimulate exports and imports in this sector, foster green growth, and may help Canadian companies to adapt to environmental regulations.

5. Initial Environmental Assessment Findings

5.1 Anticipated Economic Effects of an Environmental Goods Agreement

The Environmental Goods Agreement is expected to increase Canada’s exports of environmental goods. In 2013, Canada’s exports of environmental goods totalled $19 billion, based on the preliminary list of environmental goods that Canada consulted upon^{Footnote 9}. Over 90% of these ($17.35 billion) were traded with EGA participants^{Footnote 10}. For the same year, Canadian imports of the same goods from EGA participants totalled $ 34.91 billion^{Footnote 11}.

The average MFN tariff EGA participants apply to this same list of environmental goods is 2.52%^{Footnote 12}. However, tariffs can be much higher in certain countries. For instance, the average MFN tariffs applied by China and Korea on these environmental goods are respectively 7.26% and 6.25%^{Footnote 13}. Moreover, MFN applied tariffs on specific environmental goods can be as high as 35% in China and 10% in Korea. If the EGA succeeds in significantly reducing or eliminating tariff on a broad range of environmental goods, it should boost Canadian exports of environmental goods to other EGA participants by removing tariff barriers to trade.

Increased exports would lead to an increase in the Canadian production of environmental goods and thus in increased economic activity in Canada. It could also modify the structure of the economy by incentivizing the production of environmental goods over other products (the former facing lower tariffs when imported into Canada or exported to other EGA participants). This effect could then help reduce the production of emissions-intensive goods where environmental goods could possibly be substituted for them.

Since the average MFN tariff applied by Canada to the preliminary list of environmental goods that Canada consulted upon is already only 0.84%^{Footnote 14}, the EGA would not be expected to have a significant impact on Canadian imports of environmental goods in general. However, the EGA could increase Canadian imports in specific sectors where the EGA would result in more significant reduction of the Canadian tariffs.

5.2 Potential Environmental Impacts and Significance

The EGA would be expected to have an overall positive environmental impact. The EGA would facilitate trade liberalization of goods that benefit the environment, thereby facilitating the use of these goods and the realization of the environmental benefits associated with their use. Additional benefits could also occur as lower priced environmental goods could replace similar goods that have higher environmental footprints. Moreover, positive environmental externalities would be expected to arise as it would create an incentive for green innovation, thus furthering the positive impact of the EGA on the environment.

The EGA would promote trade in environmental goods by reducing tariffs on them, which would provide an incentive for Canadian producers to manufacture environmental goods rather than other goods (that could potentially harm the environment) since the former would face lower tariffs than the latter when exported to other EGA participants. This might result in a change of economic activity in certain sectors of the Canadian economy, as the agreement would promote the efficient allocation of resource and encourage sustainable patterns of production and consumption. Furthermore, as many of the goods that would be included in the EGA are likely to be part of the global value chain of sustainable technologies, the EGA might favour the transfer of technology. A more detailed analysis will be conducted in the final environmental assessment, once the final list of EGA goods is available.

Additionally, as it would lead to a reduction of Canada’s import tariffs on environmental goods and promote trade in these goods, the EGA would be expected to result in greater availability and variety of environmental goods in Canada. This should be associated with positive environmental effects. Moreover, the positive environmental externalities that would arise in Canada from an extensive and more efficient utilization of environmental goods might not be limited to the domestic environment: a more efficient penetration and deployment of environmental goods in other participating countries could also potentially contribute to a healthier global environment as well.

For example, a study by the International Institute for Sustainable Development calculates that the possible greenhouse gas reduction from tariff elimination on environmental goods (using a list of 153 environmental goods previously supported by a number of WTO Members in the context of the Doha Round of negotiations) would be between 0.1 and 0.9% of 2030 global greenhouse gas emissions from fossil fuel combustion^{Footnote 15}. Other environmental benefits of this agreement could also be associated with, inter alia, water and soil treatment, biodiversity, natural risk management, noise and vibration abatement, and management of solid and hazardous waste.

The increased economic activity in Canada that would be expected from the EGA would potentially enhance consumption of resources and energy and may have some negative environmental impacts. However, these impacts would not be expected to be significant due to the size of the Canadian industry for the goods that would likely be covered by a successful EGA, which at this time is relatively small compared with the current overall size of the Canadian economy. If the size of Canada’s environmental goods industry were to increase considerably in the future, it is expected that the positive impacts associated with using the environmental goods covered by the EGA would be greater than the negative impacts caused by producing them.

5.3 Mitigation and Environmental Enhancement Measures

As the EGA would not be expected to produce significant negative environmental impact, no specific mitigation measure would be required. In order to enhance the environmental benefits yielded by the EGA, Canada will seek an ambitious agreement that result in significant liberalization of environmental goods.

Another way to enhance the environmental benefits yielded by the EGA would be to reduce non-tariff barriers to trade of environmental goods. That question may be discussed by the EGA participants in the future as part of a post-EGA agenda.

6. Environmental Sustainability Indicators

Along with federal, provincial and territorial legislation related to protecting the environment, Canada tracks its performance on key environmental sustainability issues including climate change and air quality, water quality and its availability, and protecting nature as outlined in the Federal Sustainable Development Strategy. As well, the Federal Government monitors environmental issues, such as waste management, in support of sustainability.

Environmental sustainability indicators focus on the following areas:

Biodiversity: Conserving biodiversity and using biological resources in a sustainable manner are essential parts of Canada's effort to achieve sustainable development.  The Canadian Biodiversity Strategy reaffirms that governments in Canada must create the policy and research conditions that will lead to the conservation of biodiversity and the sustainable use of biological resources.^{Footnote 16} The Canadian Biodiversity Strategy, along with the complementary Biodiversity Outcomes Framework, guide action at all levels that will enhance the ability to ensure the productivity, diversity and integrity of natural systems and, as a result, the ability as a nation to develop sustainably.

Canada’s 2020 biodiversity goals and targets describe results to be achieved through the collective efforts of all Canadians, and identify specific, medium-term outcomes that are designed to support the long-term outcomes set out in Canada’s Biodiversity Outcomes Framework. The goals and targets will guide further action on the conservation and sustainable use of living resources in Canada and provide the basis for measuring and reporting on progress.

Air Contaminants and Greenhouse Gases: Air pollution is a broad term applied to any chemical, physical, or biological agent that modifies the natural characteristics of the atmosphere. Examples include particulate matter and ground-level ozone. Air pollutants fall into four main categories: criteria air contaminants (e.g. SO2, NOx, and volatile organic compounds), persistent organic pollutants (e.g. dioxins and furans), heavy metals (e.g. mercury) and toxins (e.g. benzene).

The Federal Government, along with other levels of government, industry, non-government organizations, and individuals have taken action to reduce emissions of harmful air pollutants caused by human activity.

The Canadian Council of Ministers of the Environment (CCME) serves as a principal forum for collaboration on environmental strategies, norms, and guidelines. The Air Quality Management System (AQMS), which was recently approved by the governments, with the exception of Quebec’s,^{Footnote 17} provides a comprehensive approach for improving air quality and protecting the health of Canadians and the environment. It is the product of unprecedented collaboration by the federal, provincial, and territorial governments and stakeholders, which included industry associations, non-government health and environmental organisations and Aboriginal organisations. The AQMS includes new Canadian Ambient Air Quality Standards, local air quality management by provinces and territories through air zones, coordination of regional and trans-boundary air pollution issues through air sheds, industrial emissions requirements for key industrial sectors and equipment groups, and enhanced collaboration among governments to reduce emissions from transportation vehicles and other mobile sources. Implementation of AQMS is progressing.

The Federal Government has put in place four regulations under the Canadian Environmental Protection Act, 1999 to limit air pollutants from a wide variety of on-road and off-road vehicles and engines, as follows:

• On-Road Vehicle and Engine Emission Regulations (since 2004) for cars, light and heavy trucks, motorcycles, buses, heavy-duty engines;
• Off-Road Small Spark-Ignition Engine Emission Regulations (since 2005) for small engines (typically gasoline-fuelled) that are found in equipment such as lawn and garden equipment (e.g., lawnmowers, light industrial equipment (e.g., pressure washers) and light logging equipment (e.g., chainsaws);
• Off-Road Compression-Ignition Engine Emission Regulations (since 2006) for diesel engines used in off-road applications such as construction, mining, forestry and farming equipment; and
• Marine Spark-Ignition Engine, Vessel and Off-Road Recreational Vehicle Emission Regulations (since 2012) for snowmobiles, off-road motorcycles, all-terrain vehicles, utility vehicles, personal watercraft engines, sterndrive and inboard engines, vessels with installed fuel system components.

Several provincial governments have also adopted measures aimed at pollution from vehicles. For example, Quebec has implemented a heavy-duty vehicle inspection and maintenance program, which is based on the Regulation respecting environmental standards for heavy vehicles (in force since 2006, amended in 2013), made pursuant to the Environment Quality Act.^{Footnote 18}

For greenhouse gases (GHGs), the Federal Government is taking a sector-by-sector regulatory approach to reducing GHG emissions towards the national emission reduction target of 17% below 2005 levels by 2020. The Government is aligning efforts with the United States where appropriate. Regulations are already in place for transportation and coal-fired electricity.

The Federal Government published light-duty vehicle GHG emission regulations for model years 2011-2016 in October 2010. Building on this initial action, the Federal Government published final, more stringent GHG emission regulations for light-duty vehicles of model years 2017 and beyond in October 2014. Federal regulations were also published in March 2013 to reduce GHG emissions from new on-road heavy-duty vehicles and engines for model years 2014-2018. Moreover, in October 2014, the federal government published a formal notice of its intent to develop even more stringent GHG emission regulations for post-2018 model year on-road heavy-duty vehicles and engines. In September 2012 the Government of Canada released final regulations to reduce emissions from the coal-fired electricity sector. These will impose stringent standards on new coal-fired generation units and on units that have reached the end of their economic life. They will come into effect on July 1, 2015 and will encourage the phase-out of traditional coal-fired generation and transition towards lower- or non-emitting types of generation. The Government of Canada continues to work with other levels of government, industry and stakeholders to develop GHG regulations for other major-emitting industries. The Federal Government is focused on a realistic approach to GHG regulations that will reduce emissions while continuing to create jobs and encouraging the growth of the Canadian economy.

Some provinces have also implemented GHG-reduction mechanisms. For example, Quebec has set up a cap-and-trade system for GHG emission allowances and has linked it with California’s as part of the Western Climate Initiative.^{Footnote 19} Ontario recently announced that it will implement a carbon market, which will be linked to Quebec’s and California’s. Other provinces are taking varying approaches. British Columbia has a carbon tax, while Alberta has an approach that requires a reduction in emissions intensity and includes a trading/carbon levy component. Other provinces such as Nova Scotia have sector-specific caps on emissions in important sectors.

Waste: The quantity of solid waste generated in Canada includes waste disposed in landfills and incinerators plus waste diverted for recycling and composting. The generation and management of solid waste raise important environmental, economic and social issues for Canadians.

In Canada, the responsibility for managing and reducing waste is shared among the federal, provincial, territorial and municipal governments. The federal government, in particular, administers controls on the trans-boundary movements of hazardous wastes and hazardous recyclable materials in accordance with the Basel Convention and relevant OECD decisions on wastes. It also establishes best practices and implements measures, as needed, to manage the potential release of toxic substances during their life-cycle, including from end-of-life products and waste management activities.

CCME is one forum where provincial, territorial and federal environmental authorities work together to develop policies, guidance and tools to advance the environmentally sound management of wastes in Canada and encourage waste minimization. For example, under CCME, members have adopted the Canada-wide Action Plan on Extended Producer Responsibility, the Sustainable Packaging Strategy and guidelines for hazardous waste landfills. Together they continue exploring opportunities for collaborative solutions related to waste management.

Chemicals: Chemical substances are widely used to improve the quality of our lives and their presence can be observed in the environment and in living organisms. Most of these chemical substances are not harmful to the environment or human health.

The Government of Canada manages chemical substances of concern to protect human health and the environment through the Chemicals Management Plan. Canada’s Chemicals Management Plan was launched in 2006, and is jointly managed by Environment Canada and Health Canada. Chemical substances of concern are assessed and measures are put in place to eliminate or minimise potential risks of those found to be toxic. Monitoring and surveillance activities under Canada’s Chemicals Management Plan are national in scope, and are therefore discussed further below.

National Monitoring and Tracking Programs: In addition to the initiatives outlined in specific areas above, Canada has established several ongoing monitoring programs for the environment. Ongoing monitoring and tracking programs provide valuable data and information about Canada’s performance on key environmental sustainability issues.

These include, but are not limited to:

• Monitoring and Surveillance Activities under Canada's Chemicals Management Plan – A key element of the Chemicals Management Plan is the monitoring and surveillance of levels of harmful chemicals in Canadians and their environment. Environmental and human bio-monitoring and surveillance are essential to identify and track exposure to hazards in the environment and associated health implications.
• National Pollutant Release Inventory – The Inventory is Canada's legislated, publicly accessible inventory of pollutant releases (to air, water and land), disposals and transfers for recycling.
• Canadian Environmental Quality Guidelines – The Guidelines have been established by CCME to provide nationally endorsed science based goals for the quality of atmospheric, aquatic, and terrestrial ecosystems.
• Canadian Environmental Sustainability Indicators (CESI) – This program provides data and information to track Canada’s performance on key environmental sustainability issues including climate change and air quality, water quality and availability, and protected nature. The environmental indicators are based on objective and comprehensive information and convey environmental trends in a straightforward transparent manner. Indicators are added and updated throughout the year as new data become available.

These initiatives provide valuable data and information for tracking Canada’s performance on key environmental sustainability issues. They ensure that international, national, regional, and local trends are readily accessible and transparently presented to all Canadians and will continue to be used to track sustainability when the EGA is implemented.

7. Conclusion

The EGA would be expected to reduce or eliminate tariffs on broad range of environmental goods, which would promote their trade and increase their availability. The EGA would also bring significant economic benefits (increased exports) and environmental benefits (increased use of environmentally-beneficial goods) for Canada.

Based on the findings of this Initial Environmental Assessment, environmental impacts arising from the EGA, once fully implemented, would be expected to be mostly positive. Negative environmental impacts are expected to be non-significant and incidental to increased domestic activity. Thus, production of a Draft Environmental Assessment is not required under the Framework.

Pursuant to the Framework, the next phase of the Environmental Assessment process will be to conduct a Final Environmental Assessment. The Final Environmental Assessment will include a discussion of any subsequent analysis and comments received in response to the Initial Environmental Assessment concerning the anticipated environmental impacts of the agreement on Canada, as well as a record of how the Initial Environmental Assessment was incorporated into the negotiations.

Following the conclusion of the Environmental Assessment, follow-up and monitoring, could be undertaken, if warranted, to review any mitigation or enhancement measures identified. Monitoring and follow-up activities can be undertaken anytime during the implementation of a concluded trade agreement in order to gauge the performance of its provisions from an environmental perspective.