1999 Report of the Commissioner of the Environment and Sustainable Development
Chapter 5—Streamlining Environmental Protection Through Federal-Provincial Agreements: Are They Working?
Parliament has no information on the results achieved by the Saskatchewan and Alberta Fisheries Act administrative agreements
5.2 Environment Canada was unable to provide us with documents to indicate that before entering into these agreements the federal government had formally analyzed the associated risks to determine, for example, whether both parties could do what they were agreeing to do. Therefore, we have no evidence that such an analysis was done. Furthermore, the federal government does not have a documented plan in place that indicates how it would reassume its responsibilities should a province be unable to carry out its assigned responsibilities, or should it or a province decide to terminate an agreement.
Background and other observations5.3 We examined seven federal-provincial environmental agreements under the Canadian Environmental Protection Act ( CEPA ) and the Fisheries Act . Two of the agreements include environmental protection as a stated objective. The other five agreements mention environmental protection in their preambles. There has been no evaluation of environmental performance for any of the agreements that we examined.
5.4 Environment Canada has not formally evaluated or documented the extent to which the agreements have been effective in reducing duplication.
5.5 Several improvements can be made to the design of the agreements, such as including specific reporting requirements that will be meaningful to Parliament, government, the public and industry.
5.6 Parliament has been provided with incomplete and out-of-date information on how well the agreements are working.
5.7 The federal government is planning to enter into more bilateral agreements under the Canada-Wide Accord on Environmental Harmonization. Environment Canada needs to evaluate existing bilateral agreements and incorporate the "lessons learned" into any new agreements.
Environment Canada has committed to incorporate lessons learned from working together with its provincial and territorial partners into any future negotiations. The Department is also committed to ensuring a thorough and complete flow of information to the public and to Parliament.
Fisheries and Oceans has stated that it and Environment Canada will work together to resolve concerns related to the non-designation of provincial enforcement personnel as Fisheries Act inspectors. In addition, Fisheries and Oceans has committed to include the reports prepared on the implementation of administrative agreements by Environment Canada in its annual report to Parliament on the administration of the habitat provisions of the Fisheries Act .
The federal government is planning to enter into more bilateral agreements5.8 The federal government has explored various collaborative arrangements, such as bilateral agreements with the provinces, aimed primarily at minimizing overlap and duplication of federal and provincial environmental regulations. Environment Canada has promoted the use of these agreements as a tool for improved environmental protection. When existing environmental agreements with provinces were originally signed, for example, the Minister of the Environment informed Canadians that they would result in more efficient government and better protection of the environment.
5.9 These mechanisms have been controversial, and subject to intense debate on both the political and operational fronts. In its December 1997 report to the House of Commons entitled "Harmonization and Environmental Protection: An Analysis of the Harmonization Initiative of the Canadian Council of Ministers of the Environment" (CCME), the House of Commons Standing Committee on Environment and Sustainable Development questioned the effectiveness of bilateral administrative and equivalency agreements under the Canadian Environmental Protection Act and the Fisheries Act.
5.10 The Committee recommended that the Auditor General of Canada evaluate the federal government's performance under the existing bilateral agreements. The Committee formally recommended that the implementation of the earlier agreements be thoroughly analyzed before the Government of Canada committed itself to a new model of interjurisdictional co-operation through the Canada-Wide Accord on Environmental Harmonization.
5.11 On 29 January 1998, the Accord was signed by all jurisdictions except Quebec. It provides for developing sub-agreements in areas of environmental management that could benefit from Canada-wide co-ordinated action. Bilateral agreements may be negotiated to implement several sub-agreements in such areas as inspection, enforcement and monitoring. (See the Appendix to this chapter for more information on the purpose, objectives and principles of the Accord).
5.12 In February 1998, the Commissioner of the Environment and Sustainable Development agreed to assess whether existing agreements are working and whether the federal government is aware of their impact on environmental quality. We did not attempt to address whether bilateral agreements are the appropriate mechanisms for protecting the environment.
Equivalency and administrative agreements5.13 The Canadian Environmental Protection Act (CEPA) authorizes the Minister of the Environment to sign "equivalency agreements" with the provinces. Equivalency agreements suspend the application of the specified federal CEPA regulations in the signing province, so that only the equivalent provincial regulations apply. However, the federal Minister of the Environment remains responsible for reporting annually to Parliament on the administration of the CEPA provisions that permit these equivalency agreements.
5.14 The CEPA further authorizes the development of ``administrative agreements" with the provinces. These allow the federal and provincial governments to share administration of the specified regulations and provide industry with a "single window" to government. The agreements can cover such activities as inspection, enforcement, monitoring and reporting. However, both levels of government retain their respective responsibilities.
5.15 In addition to the equivalency and administrative agreements provided for under CEPA , Environment Canada and the Department of Fisheries and Oceans have also negotiated administrative agreements with the provinces under the pollution prevention provisions of the Fisheries Act .
5.16 Based on a 1978 Prime Ministerial directive, Environment Canada is responsible for administering and enforcing the pollution prevention provisions under section 36 of the Fisheries Act . Section 36 prohibits the deposit of deleterious substances into waters frequented by fish, except where allowed by regulation. Although the responsibilities for section 36 are assigned to the Minister of the Environment, the Minister of Fisheries and Oceans is ultimately accountable for their implementation.
Focus of the audit5.17 This audit examined seven bilateral environmental agreements under the Canadian Environmental Protection Act (CEPA) and the Fisheries Act. Environment Canada administers a total of 32 regulations under these Acts. To date, it has concluded agreements with four provinces (Alberta, British Columbia, Quebec and Saskatchewan) covering 15 regulations under CEPA and the Fisheries Act that focus largely on pulp and paper. Exhibit 5.1 indicates the type and scope of each agreement we audited.
5.18 We focussed only on areas of federal responsibility under each agreement, since our mandate does not permit us to audit provincial responsibilities. The Canada-Yukon Environmental Protection Agreement, an administrative agreement under CEPA , was excluded from the scope of our audit because it does not assign specific responsibilities to the federal government at the same level of detail as the other seven agreements.
5.19 Our audit sought to determine whether the agreements provide appropriate accountability, and whether the federal government met its obligations in establishing the agreements and is meeting its own specific obligations under the agreements. We also wanted to know if the federal government is evaluating the effectiveness of the agreements as a means for administering environmental legislation.
5.20 As reflected in our detailed criteria, our general expectations were that the following elements would be part of establishing and implementing a federal-provincial environmental agreement:
- a clear goal of protecting the environment while decreasing the costs to the taxpayer;
- mechanisms designed to hold responsible parties accountable, such as requirements for audit;
- regular reporting to Parliament so that everyone can understand whether the agreements are working;
- an analysis of the associated risks before entering into an agreement;
- a plan in place to reassume federal responsibilities if necessary;
- a clear understanding of who is responsible for what;
- an evaluation of how well the agreements are working, both in improving environmental quality and in streamlining administrative overlap and duplication.
5.22 In addition to our observations common to all agreements, we have presented our implementation findings specific to each agreement in exhibits that identify areas working as intended and those that need improvement. All of the information in the charts represents significant audit observations. The narrative that references each exhibit includes examples of key areas that require improvement and provides a brief overview of issues unique to each agreement.
Observations and Recommendations
Limited reference to environmental protection in the agreements' objectives5.23 All of the agreements we audited focus on the streamlining and co-ordination of administrative and regulatory activities between the federal and provincial levels of government. Although five agreements mention environmental protection in their preamble, only the two administrative agreements with Saskatchewan include environmental protection as a stated objective. Environment Canada is promoting the agreements by citing improved environmental protection as a benefit of the agreements.
Agreements' impact on environmental performance has not been evaluated5.24 In the five agreements without an environmental protection objective, there is no stated requirement to evaluate whether the agreements have contributed to improved environmental performance. Environment Canada informed us that it does not think it is possible to evaluate the extent to which the agreements have contributed to measured environmental improvements. Nevertheless, under the agreements Environment Canada retains responsibility for environmental protection under the Canadian Environmental Protection Act (CEPA) and section 36 of the Fisheries Act .
Impact on Industry
Some industries left with an "expectation gap"5.25 Industries affected by the agreements have informed us that they had believed the agreements would address more of their concerns about dealing with two levels of government. In fact, the impact on industry has been minimal. Some representatives of the pulp and paper industry told us they are disappointed that the agreements have not addressed many important issues of duplication. In many cases, industry expected that the bilateral agreements would resolve regulatory inconsistencies between levels of government. However, the agreements are administrative in nature and cannot resolve all regulatory inconsistencies.
Problems With Design of Agreements
No audit provisions in the agreements5.26 Without provision for audit, neither level of government is required to independently or jointly verify information supplied by the other level of government. This makes it difficult to properly verify expenditures and, moreover, the federal government cannot be certain that any agreement has been fully implemented and is functioning as intended.
No detailed accounting of federal funds transferred5.27 Under the pulp and paper administrative agreements with British Columbia and Quebec, federal funds were transferred to the province. However, the agreements did not contain performance standards for provincial activities that received federal funds.
5.28 For example, in British Columbia, during 1995 and 1996 a total of $328,000 was transferred from the federal government to reimburse the province for the incremental costs it incurred in undertaking activities under the agreement on behalf of the federal government. However, the federal government cannot account for the province's spending of this federal money or the results it achieved.
No requirement to report evaluation results5.29 For each agreement, management committees were to be established to set priorities, define procedures, evaluate the agreement's administration and implementation, and prepare an annual report. However, there is no requirement for the management committees to formally report the results of the evaluations. We believe that reporting their results is necessary to provide feedback to all parties on what is working well and what requires improvement.
Weak guidelines for annual reporting5.30 The agreements provide limited guidance on the kinds of information and the level of detail that the annual reports should contain. There is therefore no guarantee of consistency in the quantity and quality of the information reported, and little accountability for results achieved. In addition, it is not clear for whom the reports are intended.
5.31 Environment Canada should ensure that future bilateral agreements build in accountability mechanisms including, but not limited to, provisions for audit, performance standards and specific reporting requirements - including reporting on evaluations of the agreements' effectiveness in meeting their objectives.
Implementation Problems Common to All Agreements
Lack of ongoing analysis once an agreement is in place5.32 Environment Canada has not formally analyzed how provincial activities, including downsizing, could affect the implementation of the agreements and, ultimately, the protection of the environment. The lack of ongoing analysis is of particular concern in the provinces of Alberta and Saskatchewan, where, at the time of our audit, each provincial government was reorganizing its environmental protection services from a centralized to a regional structure. There is a risk that information sharing with these provinces will be lost or reduced as many of the personal contacts and informal protocols that Environment Canada has established with the provincial governments will change or disappear over time.
5.33 Environment Canada should monitor and analyze provincial activities in those areas that could adversely affect the successful implementation of the agreements.
Duplication not analyzed5.34 The primary objectives of all of the agreements are to reduce duplication and streamline administration. Environment Canada has not formally evaluated or documented the extent to which the agreements have been effective in reducing duplication. Consequently, the Department was not able to provide us with any documented evidence that such an analysis was done.
Weak annual reporting of meaningful results5.35 The annual reports required from the management committees under the agreements contain limited information and lack details. Under one agreement, annual reports were never produced. Under another, the report included information not relevant to the agreement. Without proper reporting on the agreements, it is very difficult for the federal government to manage their implementation effectively.
Implementing the Agreements
Alberta equivalency and administrative agreements5.36 Very good working relationship between the two levels of government. Our interviews indicated that industry and both levels of government are generally satisfied with the way the agreements are working, and the level of co-operation is good. However, as noted in Exhibits 5.2 and 5.3 , there are several opportunities for improvement in both the CEPA equivalency agreement and the Fisheries Act administrative agreement.
5.37 The Alberta equivalency agreement is the only equivalency agreement negotiated to date. The industries currently affected by this agreement include two vinyl chloride plants and seven pulp and paper mills. The secondary lead smelter, which was originally affected by the agreement, is no longer operating.
5.38 Federal government lacks detailed provincial information. The main deficiency in the implementation of the CEPA equivalency agreement is that the federal government does not have detailed provincial information, particularly information on related provincial inspections and associated enforcement activities (Exhibit 5.2). Given that federal regulations are suspended in favour of equivalent provincial regulations, it is particularly important that the federal government receive complete information on the provincial activity. Without such information, Environment Canada is not in a position to ensure that the equivalent federal requirements are satisfactorily enforced and that its legislated responsibilities are being carried out.
5.39 Nor does Environment Canada have detailed provincial information on the Fisheries Act administrative agreement, particularly information on related provincial inspections and associated enforcement activities (Exhibit 5.3) . Environment Canada was unable to provide us with detailed documentation about this activity that would indicate whether the enforcement of federal regulations covered by the agreements is carried out properly.
5.40 Environment Canada should ensure that it receives all the provincial information needed to assess whether the enforcement of federal regulations covered by the agreements is adequate.
British Columbia pulp and paper administrative agreement5.41 This agreement, covering 27 pulp and paper mills, had not worked as intended when it expired in March 1996 . The lack of co-operation between the federal and provincial governments resulted in a failure to implement many aspects of this agreement. At issue in most of the disputes between the two governments was the adequacy of federal funding provided to the province to undertake activities on the federal government's behalf. The province claimed that federal funding of $166,000 per year was insufficient, while Environment Canada claimed that it was too much.
5.42 Many of the important features of the agreement, such as the establishment of a federal-provincial management committee and the development of a joint inspection plan, were never implemented (Exhibit 5.4) . Although the management committee was required to report annually on the results of the agreement's implementation, no annual reports were produced. A new agreement has been drafted (not yet concluded) to replace the first agreement but there is no documented evaluation of what worked well under the first agreement and what did not.
5.43 Environment Canada should formally evaluate the expired British Columbia pulp and paper agreement and integrate lessons learned from our audit into any future agreements.
5.44 Unlike the first agreement, the new draft agreement has not yet been reviewed by stakeholders. In our view, the experience of industry is important feedback to improve future agreements. Environment Canada supports this view; it is currently promoting stakeholder participation as a fundamental principle of the Canada-Wide Accord on Environmental Harmonization (Appendix) . In addition, an Annex to the Accord, signed in September 1998, emphasizes the importance of stakeholder involvement.
Quebec pulp and paper administrative agreements5.45 Implementation has been slow. The implementation of the first pulp and paper administrative agreement was slow and the new agreement continues to present some challenges to the federal government. The first agreement was signed in May 1994 and expired January 1996. Environment Canada and the province then agreed to work co-operatively in the spirit of the agreement until a new agreement was signed. Since the signing of the new agreement in December 1997 (effective until March 2000) there are indications of improvement, for example in the flow of information and validation of data.
5.46 These agreements cover 61 pulp and paper mills -- about 40 percent of all the pulp and paper mills in Canada. Exhibit 5.5 identifies the areas in the two pulp and paper administrative agreements that worked or are working as intended as well as areas for improvement.
5.47 Slow start for electronic data exchange . A central focus of the first agreement was the establishment of a computer system to create a "single window" for electronic data exchange. Although there were many problems with the development of the software and the implementation of the computer system, progress has been made. As of spring 1998, electronic data are sent monthly by each pulp and paper mill to the province and then forwarded to the federal government for analysis.
5.48 The computer system creates more work for industry . Although the system is now functioning under the second agreement, industry officials told us that it has resulted in more work for industry with little benefit. For example, the computer system is not user-friendly and is very inflexible. Industry cannot use the system for its own analyses, so it has to maintain parallel computer systems. This double entry of data means duplication of effort, increased costs to industry and greater opportunity for error.
5.49 Environment Canada informed us that the software was not intended to be designed and developed to meet industry's needs. Instead, it was designed in a way that would prevent each mill from making changes to suit its own needs. Environment Canada believes that revising the software to meet industry's needs would make it unusable for both levels of government.
5.50 In May 1992 the federal government adopted new regulations under the Fisheries Act governing the discharge of effluent into water. These new regulations, designed to control the quality of effluent from pulp and paper mills, came into effect on 1 December 1992. Regulatory permits or "transitional authorities" were available from the federal government to allow the pulp and paper mills to delay compliance while they put the necessary treatment equipment in place.
5.51 In Quebec, 42 mills took advantage of the transitional authority and were granted three years to conform to the new federal standards. All mills were to be in compliance with the regulations no later than 31 December 1995. The signing of the first agreement in May 1994 did not relieve industries in the province of their duty to comply with federal regulations.
5.52 Both agreements require that the province collect the information it needs to determine compliance with its regulations under provincial legislation and provide this information to Environment Canada. Environment Canada uses the information to satisfy itself that federal regulations are adequately complied with. The agreement clearly stipulates that the federal government and the province of Quebec would each retain its authority to intervene in the case of alleged violations of its own regulations.
5.53 Environment Canada's Enforcement and Compliance Policy for CEPA states that its purpose is to facilitate compliance with the Act. The desired result is compliance with the Act within the shortest possible time frame and with no further violation. Factors to be considered include the violator's history of compliance with the Act and provincial regulations deemed by order-in-council to be equivalent to those under the federal Act, willingness to co-operate with enforcement officials, evidence of corrective action already taken, and the existence of enforcement actions by other federal or provincial authorities as a result of the same activity but brought under other statutes.
5.54 According to the policy, federal enforcement officials are to examine every suspected violation of which they have knowledge, and are to take action consistent with the criteria in the policy. Federal responses available to deal with violations include warnings, written directions by inspectors, orders by the Minister, injunctions and prosecutions. From 1995 to 1997 there were no federal enforcement responses taken against any non-compliant pulp and paper mills in the province of Quebec.
5.55 From 1995 to 1997, Quebec pulp and paper mills experienced some compliance problems. Environment Canada identified 12 mills in 1995 and 13 mills in 1996 as problematic. In 1997 20 mills had problems with compliance.
5.56 According to information obtained from Environment Canada, during those three years the province communicated, met with, or sent warning letters to most of these non-compliant mills and prosecuted one mill. Where none of these interventions were made by the province (four mills in 1995, three mills in 1996, and seven mills in 1997) the province either considered the violations to be isolated incidents or it negotiated a corrective plan with the non-compliant mill.
5.57 Corrective plans negotiated by the province with a mill identify the course of action the mill would follow to comply with provincial regulations. Both levels of government have sent a letter to the mills indicating that these corrective plans are in no way binding on the federal government and do not exempt the Quebec mills from complying with federal regulations.
5.58 Environment Canada considers a corrective plan to be a satisfactory mechanism for the province to address issues of non-compliance. Environment Canada was unable to provide us with any corrective plans. We observed that a corrective plan has not always ensured continued compliance and, in our view, does not preclude a federal enforcement response where appropriate.
5.59 To a large extent, the negotiation of corrective plans reflects a difference between the enforcement philosophies of the federal and provincial governments. The approach in Quebec of working co-operatively with industry to correct non-compliance has been favoured over the federal government's CEPA Enforcement and Compliance Policy - to examine every suspected violation and, if it is substantiated, to proceed with an appropriate enforcement response. Nevertheless, under the administrative agreement Environment Canada retains its right to enforce federal regulations should it believe that the province is not ensuring that comparable provincial regulations are adequately complied with.
5.60 Where industry does not comply with federal regulations and there is no provincial interventions under comparable provincial regulations, Environment Canada should exercise its enforcement authority where appropriate.
5.61 Agreements did not involve adequate participation by stakeholders according to industry officials. Although Environment Canada did hold meetings with non-government organizations and industry, industry believes that it was not consulted adequately. Our interviews with representatives of the pulp and paper industry indicate that they are disappointed with the level of their involvement in establishing both of the agreements. They told us they would welcome the opportunity to participate more in determining both the design and the scope of future bilateral agreements.
5.62 Environment Canada should broaden its efforts to solicit the views of all stakeholders prior to signing future bilateral agreements.
5.63 Quebec provincial inspectors have not been designated as inspectors for the purposes of the Fisheries Act under either the expired or the recently renewed agreement . Concerns over the non-designation of provincial inspectors for the purposes of the Fisheries Act were first raised by the Department of Fisheries and Oceans in late October 1997.
5.64 In order to be designated a Fisheries Act inspector, a person must participate in a course provided by the federal government and then successfully complete a federal examination. Given that the provincial inspectors in Quebec have not taken the necessary course and examination, the following concerns were raised by the Department of Fisheries and Oceans:
Quebec inspectors cannot conduct inspections or investigations under the Fisheries Act . Quebec inspectors can only lawfully obtain evidence for alleged violations of the Quebec statute and cannot provide that evidence to the federal government. The only way the federal government could obtain the evidence is through a search warrant, or to conduct an investigation itself.5.65 Despite these concerns, Fisheries and Oceans recommended that its Minister sign the renewed Quebec agreement. The Department was in contact with Environment Canada to inform it of these concerns. While discussions between Fisheries and Oceans and Environment Canada were still under way, the agreement was signed by all ministers and formally announced to the public on 16 December 1997.
5.66 Approximately three months later, the same issue of non-designated provincial inspectors for the purposes of the Fisheries Act under the Quebec pulp and paper agreement was formally communicated by Fisheries and Oceans to the Deputy Minister of Environment Canada. Fisheries and Oceans expressed concern that, through administrative agreements, Environment Canada has created circumstances that have hampered or could hamper the Crown's ability to seek redress through the courts for violations of Fisheries Act section 36.
5.67 Before signing more bilateral agreements, the Department of Fisheries and Oceans and Environment Canada should clarify whether the non-designation of provincial enforcement personnel as Fisheries Act inspectors would negatively affect the federal government's ability to enforce its own regulations.
Fisheries and Oceans' response: Fisheries and Oceans and Environment Canada will work together to resolve these concerns.
5.68 Renewed agreement addresses some problem areas . As of January 1998, initiatives required by the new agreement have been put in place that appear to be addressing some of the past deficiencies. For example, the flow of information from the province to the federal government has greatly improved, and federal money transferred to the province is now targeted toward validation of data. In addition, the federal-provincial management committee set up under both agreements is now beginning to focus on pulp and paper mills that remain problematic.
Saskatchewan administrative agreements5.69 Limited impact. Both the CEPA and Fisheries Act administrative agreements in the province of Saskatchewan have had little or no impact on the federal government's environmental protection programs or on industry due to the limited scope of the industries covered by the agreement. For example, only one pulp and paper mill in the province is affected by both agreements. Also, the CEPA administrative agreement affects industries that deal with polychlorinated biphenyls (PCBs), the manufacture of ozone-depleting substances (ODS) and the sale of products containing ODS. But, most previously stored PCBs have been shipped out of the province and there are no manufacturers of ODS in the province, although there are many suppliers.
5.71 Problems with flow of information. The main operational deficiency with the CEPA administrative agreement is in the flow of information to the federal government. In particular, the federal government is not receiving the information needed to ensure that federal PCB regulations are administered and enforced if necessary. However, Environment Canada has not attempted to determine whether the breakdown in the flow of information occurs between industry and the province or between the province and the Department, or both.
5.72 Some federal regulations covered in the CEPA administrative agreement, such as the Federal Mobile PCB Treatment and Destruction Regulations, no longer regulate industry in the province. Currently there are no mobile PCB treatment and destruction facilities in the province. Other CEPA regulations covered by the agreement have minimal impact. For example, the Pulp and Paper Mill Defoamer and Wood Chip Regulations apply to pulp and paper mills that use a defoamer containing either dibenzofuran or dibenzo-para-dioxin. The regulations also state that no mill in Canada shall use woodchips made from wood that has been treated with polychlorinated phenols. The defoaming agent currently used by the one pulp and paper mill covered by the agreement is water-based and contains no mineral oils or other petroleum derived products. Its compliance with the regulations is thus not an ongoing concern. In addition, the mill has guarantees from all of its woodchip suppliers that the woodchips are free of polychlorinated phenols.
5.73 Conversely, several CEPA regulations that do apply in Saskatchewan are not covered by the agreement. Inclusion of these regulations could provide opportunities to maximize the effectiveness of each party's resources and to lessen the administrative burden. Environment Canada has suggested the CEPA Export and Import of Hazardous Wastes Regulations as a good candidate.
5.74 Environment Canada should review the relevance of the current regulations covered under the CEPA administrative agreement with Saskatchewan and consider including other regulations in any future agreements.
5.75 Environment Canada views the establishment of a "single window" for the reporting of spills as one area where both the CEPA and the Fisheries Act administrative agreements could streamline government interaction with both industry and the general public to one level of government. The spill line is a 24-hour, seven-day-a-week toll-free telephone service that is available to receive reports of all environmental occurrences in Saskatchewan. The responsibility for answering the spill line now rests with the provincial government, and the province is to notify Environment Canada of any spills that violate federal regulations.
5.76 Spill line not always effective. Indications are that the spill line is not always used. For instance, industry sometimes bypasses the "single window" spill line by calling a provincial contact directly. As another example, six days after a spill Environment Canada learned through the media that 1.5 million gallons of raw sewage had been accidentally dumped into the Moose Jaw River.
5.77 Environment Canada has taken some action to address the problems with the spill line. For example, it has recently trained provincial conservation officers who answer the spill line. However, a protocol for notifying Environment Canada has not been documented.
5.78 Environment Canada should work with the province to document and implement a process to ensure that it is promptly notified of all spills violating federal regulations.
Reporting to Parliament5.79 Effective accountability requires that what has been accomplished be reported. Federal ministers are responsible to Parliament and ultimately to the Canadian people. To demonstrate the performance achieved and the lessons learned, the information reported to Parliament on the agreements needs to be meaningful, complete, timely, reliable and understandable.
5.80 A statutory reporting requirement under CEPA requires the Minister of the Environment to lay before Parliament an annual report on the administration and enforcement of the Act. When there are administrative agreements with the provinces, the Act requires that this annual report include a section on CEPA's administration under the agreements. When there are equivalency agreements there is a requirement for the Minister to report annually to Parliament on the administration of the provisions of CEPA that permit these equivalency agreements.
Parliament has little information on how well CEPA agreements are working5.81 Information related to the agreements under CEPA is limited to the CEPA annual report and is not found in any other documents tabled in Parliament. When we reviewed the information in the CEPA annual reports, we found that it was incomplete and two years out of date. At the time of the audit (1998), the most recent CEPA annual report available was for the fiscal year 1995-96.
5.82 In its June 1995 report, "It's About Our Health! Towards Pollution Prevention", the Standing Committee on Environment and Sustainable Development suggested that the CEPA annual report should contain information that would allow both the public and parliamentarians to analyze and assess the operation of the agreements. The Committee suggested that:
at a minimum, the report should contain information on provincial inspection, investigation, verification and enforcement activities, data on spills and releases, and information on disputes that have arisen under the agreements.5.83 In its reports to Parliament, Environment Canada should include more meaningful, complete, timely, reliable, understandable and results-based information on the CEPA equivalency and administrative agreements.
Parliament has no information on the results achieved by the Saskatchewan and Alberta Fisheries Act administrative agreements5.84 The Fisheries Act requires annual reports to Parliament on the administration and enforcement of the provisions of the Act related to pollution prevention. However, these reports contain no information on the federal-provincial administrative agreements under the Fisheries Act.
5.85 The Department of Fisheries and Oceans should ensure that Parliament receives meaningful, complete, timely, reliable, understandable and results-based information on the Fisheries Act administrative agreements.
Fisheries and Oceans' response: Environment Canada administers section 36 of the Fisheries Act and prepares annual reports on the implementation of administrative agreements made pursuant to this section. Fisheries and Oceans will include these reports in its annual report to Parliament on the administration of the habitat provisions of the Fisheries Act.
Moving Forward: Implications for the Harmonization Accord5.86 The bilateral agreements examined in this audit were negotiated and signed prior to the harmonization initiative. The Canada-Wide Accord on Environmental Harmonization, signed in January 1998, provides a framework for new bilateral agreements (see Appendix) . For example, new bilateral agreements may be negotiated in the areas of inspection, enforcement and monitoring. At the time of the audit, no bilateral implementation agreements had been negotiated and signed under the framework of the Accord.
5.87 The Accord and its annex and the sub-agreements existing at the time of the audit contain a number of provisions that, if implemented through bilateral agreements, may correct many of the deficiencies we have noted in this audit. These include provisions for setting clear objectives; involving stakeholders; sharing information; evaluating the agreements; reporting regularly to the public to demonstrate that obligations have been met; and providing a mechanism to rectify non-performance by a level of government. We note, however, that the Accord and its sub-agreements do not contain provisions for either party to an agreement to conduct independent or joint verification of information supplied by the other party. In addition, it is uncertain to what extent the provisions of the Accord will affect future bilateral agreements with Quebec, as it is not a signatory to the Accord. We are encouraged by the provisions contained in the Accord and its sub-agreements, but until specific bilateral agreements are negotiated and come into force it is not clear to what extent those provisions will address the concerns raised in this chapter.
5.88 Environment Canada should formally evaluate the existing bilateral agreements and take corrective action in the areas that are not working as intended before entering into more bilateral agreements under the Canada-Wide Accord on Environmental Harmonization.
5.89 Our audit determined that the federal government did not conduct a "due diligence" analysis prior to entering into each of the existing bilateral agreements that we audited. A "due diligence" analysis would demonstrate that Environment Canada had taken adequate steps to acquire appropriate knowledge or appropriate professional advice on the potential risks posed by the agreements. Such an analysis would determine whether both parties had the necessary resources and expertise to fulfil their respective roles and responsibilities. Other issues such as technological compatibility, training and any legal implications could also be examined.
5.90 Before renewing an existing bilateral agreement or entering into a new one, Environment Canada should undertake an analysis to assure itself that both parties are able to carry out their responsibilities for properly implementing the agreement.
5.91 We observed that the federal government does not have a documented plan in place that indicates how it would reassume its responsibilities if a province were unable to carry out its assigned responsibilities or if either government decided to terminate an agreement. This raises the question of how the federal government would re-establish its enforcement capabilities, particularly in the case of an equivalency agreement under which federal enforcement had been removed for several years.
5.92 By entering into these bilateral agreements, the federal government has removed itself from day-to-day contact with the regulated community affected by the agreements. In our view, it is important that the federal government maintain a minimal ongoing working knowledge of both the industry and the regulations covered by the agreement. In addition, the federal government needs to identify the human, physical, financial and technological resources it would need to be able to reassume its responsibilities. The annual sharing of work plans that outlined anticipated activities by both parties would assist Environment Canada in reassuming its enforcement responsibilities in the event that a province failed to deliver or either government decided to terminate the agreement.
5.93 Environment Canada should ensure that it would be able to reassume its enforcement responsibilities in the event that a province failed to deliver or either government decided to terminate the agreement.
5.95 Only two of the seven agreements we audited referred to environmental protection as a stated objective. Environment Canada has not evaluated the impact of any of the agreements on environmental performance.
5.96 Although the agreements have built in some accountability mechanisms, other important ones are absent, such as provisions for audit, accounting for federal funds transferred, and specific requirements for reporting.
5.97 Parliament is receiving incomplete and outdated information on the results of the CEPA agreements and no information on the results of the Fisheries Act agreements.
5.98 Prior to entering into an agreement, the federal government did not conduct a formal analysis to evaluate whether both parties to the agreement were able to properly carry out their assigned responsibilities.
5.99 The federal government does not have a documented plan in place that indicates how it would reassume its responsibilities if a province were unable to carry out its assigned responsibilities or if either government decided to terminate an agreement.
5.100 The audit identified some areas where the federal government has met its responsibilities under the agreements, and other areas where it has not. Key features of the agreements have not been implemented, which has impeded their success. The agreements have been implemented with varying degrees of success and are not working as well as they could.
5.101 If Environment Canada does not take corrective action, there is a risk that the environment could suffer as a result of deficiencies in both existing and future bilateral environmental agreements.
Environment Canada's response: The Commissioner's Office has raised a number of management issues related to the design and implementation of these early agreements. It should be noted, however, that they are but one of many tools being used by Environment Canada and other governments to protect the environment. The focus of these agreements, originally signed in 1994, was to develop co-operative, administrative mechanisms to aid governments in delivering regulatory and other programs designed to protect the environment.
Since the signing of these first-generation agreements, much progress has been achieved. The lessons learned, which are reflected in the recommendations made in this chapter, have been incorporated into the new environmental protection framework negotiated by the Canadian Council of Ministers of the Environment. The Canada-Wide Accord on Environmental Harmonization and its three sub-agreements, signed in January 1998, as well as the Annex to the Accord signed in September 1998, include sound accountability mechanisms and enhanced reporting requirements that are consistent with the recommendations of the Commissioner. The agreements under the Accord serve as the benchmark for all future agreements.
Environment Canada will continue to incorporate into any future negotiations lessons learned from working together with its provincial and territorial partners. The Department is also committed to working with provinces to ensure a thorough and complete flow of information to the public and to Parliament, as required by statute.
About the Audit
In its December 1997 report to the House of Commons entitled "Harmonization and Environmental Protection: An Analysis of the Harmonization Initiative of the Canadian Council of Ministers of the Environment", the Standing Committee on Environment and Sustainable Development questioned the effectiveness of existing co-operative mechanisms, such as the bilateral administrative and equivalency agreements made possible under the Canadian Environmental Protection Act (CEPA) and the Fisheries Act.
The Committee considered our Office to be the most appropriate body to evaluate the federal government's performance under the existing bilateral agreements. It formally recommended that a thorough analysis of the implementation of the earlier agreements be conducted before the Government of Canada committed itself to a new model of interjurisdictional co-operation through the Canada-Wide Accord on Environmental Harmonization and its Sub-Agreements.
On 27 February 1998, the Commissioner of the Environment and Sustainable Development wrote to the Chair of the Committee and agreed to carry out the audit, indicating that the results would be included in his 1999 Report to the House of Commons.
On 25 May 1998, the Standing Committee on Environment and Sustainable Development released its report, "Enforcing Canada's Pollution Laws: The Public Interest Must Come First!". The report acknowledged that the Commissioner had agreed to conduct the audit of the bilateral environmental agreements, and recommended that the Minister of the Environment delay the signing of the Sub-agreement on Enforcement until after the tabling of the Commissioner's Report in the House of Commons.
ScopeThe audit examined seven agreements under the Canadian Environmental Protection Act ( CEPA) and the Fisheries Act.
Two agreements were developed under CEPA :
- Agreement on the Equivalency of Federal and Alberta Regulations for the Control of Toxic Substances in Alberta.
- Canada-Saskatchewan Administrative Agreement for the Canadian Environmental Protection Act .
- Canada-Alberta Administrative Agreement for the Control of Deposits of Deleterious Substances.
- Canada-Saskatchewan Administrative Agreement for the Control of Deposits of Deleterious Substances.
- Agreement between the Government of Quebec and the Government of Canada in the Context of the Application in Quebec of Federal Pulp and Paper Mill Regulations. (It expired 1 January 1996.)
- Agreement between the Government of Quebec and the Government of Canada in the Context of the Application in Quebec of Federal Pulp and Paper Mill Regulations. (It was renewed 16 December 1997 and remains in force until 31 March 2000.)
- Agreement on the Administration of Federal and Provincial Legislation for the Control of Liquid Effluents from Pulp and Paper Mills in the Province of British Columbia. (It expired 31 March 1996. The provincial and the federal governments have drafted a new agreement to replace the expired one. However it had not yet been finalized or signed at this writing.)
Objectives and CriteriaTo determine whether the agreements provide appropriate accountability
We expected that:
- the agreements would have clear objectives that defined their success, both operationally and in terms of environmental impact;
- the federal government would have built in appropriate accountability mechanisms, including audit provisions, redress mechanisms, evaluation, and adequate reporting on the agreement; and
- reporting to Parliament would be relevant, reliable and understandable.
We expected that the federal government would have:
- carried out a "due diligence analysis" to determine whether the provinces were able to carry out their responsibilities, before entering into any agreement with a province; and
- put in place a practical mechanism to take appropriate action if a province is not fulfilling its obligations.
We expected that the federal government would have:
- carried out its assigned responsibilities under the agreements;
- monitored the province's capacity to carry out its assigned responsibilities;
- assured itself that the provinces were fulfilling their obligations under the agreements by requiring or carrying out an appropriate evaluation of the results;
- carried out the appropriate analysis to satisfy itself that the information reported by the provinces was relevant and reliable;
- maintained ongoing liaison with the provinces regarding the status of the agreements;
- reviewed these agreements from time to time to ensure that they remained adequate both operationally and environmentally; and
- reported on a regular basis the extent to which these agreements were operationally and environmentally effective.
We expected that the federal government would have:
- evaluated the effectiveness of the agreements in terms of their administration; and
- evaluated the effectiveness of the agreements in terms of their environmental impact.
ApproachWe conducted a detailed analysis of the contents of each agreement. Based on our analysis, we have made observations on the accountability mechanisms addressed and not addressed by the agreements.
The audit work focussed on Environment Canada, and was supported by interviews with officials from Fisheries and Oceans. File review and interviews with Environment Canada officials were conducted at its headquarters and in each regional office where an agreement was in place.
Also, interviews were conducted in Alberta, British Columbia, Quebec and Saskatchewan with provincial officials and representatives of the regulated community to obtain their views on the implementation of the agreements.
Audit TeamPrincipal: Wayne Cluskey
Director: John Affleck
For information, please contact Wayne Cluskey.