A Companion Document to the Notice of Intent to Develop and Implement Regulations and Other Measures to Reduce Air Emissions

This discussion paper presents elements and options of Canada's proposed plan to develop regulations for air emissions from key industrial sectors. The intent of this plan is to ensure Canada has enforceable national air emissions targets to reduce emissions of air pollutants and greenhouse gases to achieve tangible benefits to the health of Canadians and the environment.

This document does not elaborate on all of the Government's proposed regulations or other measures for major sources of air emissions as outlined in the Notice of Intent. Information on other proposed actions related to transportation, consumer and commercial products, and indoor air will be provided through separate consultations processes.

November, 2006

1. Introduction
2. Scope of the Proposed Regulatory Actions
3. Consultation Process
   • 3.1 Development of Regulatory Framework
   • 3.2 Development of Regulations
4. Discussion Questions
5. Proposed Elements of the Regulatory Framework
   • 5.1 Short-term Emission Targets and Timelines
   • 5.2 Compliance Options
   • 5.3 Compliance Assessment, Monitoring and Reporting
6. Equivalency and Administration Agreements
7. Medium and Long-Term Targets
8. Next Steps

In tabling Canada's Clean Air Act, the Government has honoured its commitment to introduce legislation to enable effective regulation of both air pollutants and greenhouse gases to reduce the health and environmental risks across the country. If approved by Parliament, the proposed amendments to the Canadian Environmental Protection Act 1999 (CEPA 1999) set out in Canada's Clean Air Act will provide the government with clear authority to regulate emissions of air pollutants and greenhouse gases and enhance provisions to enable the use of emissions trading and equivalency agreements.

This document does not elaborate on all of the Government's proposed regulations or other measures for major sources of air emissions as outlined in the Notice of Intent. Information on other proposed actions related to transportation, consumer and commercial products, and indoor air will be provided through separate consultations processes.

The purpose of this discussion paper is to elaborate on the Government's proposed integrated approach to develop and implement a series of regulatory measures to reduce emissions of both air pollutants and greenhouse gases (hereinafter referred to collectively as "air emissions") from key industrial sectors, including: fossil fuel-fired electricity generation; upstream oil and gas; downstream petroleum; base metal smelters; iron and steel; cement; forest products; and chemicals production. It serves as a supplement to the Notice of Intent to Develop and Implement Regulations and Other Measures to Reduce Air Emissions. This discussion document also describes the consultation process and serves to initiate the engagement of provinces, territories, industry, aboriginal groups and other stakeholders, including health non-governmental organizations, in the development of the regulatory framework. The document is organized as follows:

Introduction, which provides some background to the proposed regulatory approach, states the purpose of the document and presents an overview of its content;.

Scope of the Proposed Regulatory Actions, which provides the context for the proposed regulatory framework and indicates which sectors and pollutants would be targeted;

Consultation Process, which outlines the process by which the Government will engage Canadians;

Discussion Questions;

Proposed Elements of the Regulatory Framework, which sets out elements of the proposed regulatory framework for discussion around the key questions;

Equivalency and Administration Agreements, which outlines the Government's intention to work in partnership with provinces and territories through equivalency and administrative agreements in implementing the regulations;

Medium and Long-term Targets, which provides an overview of the Government's approach to developing medium- to long-term goals for reducing air pollutants and greenhouse gases; and

Next Steps, which describes the process and timeline for submitting comments.

The proposed actions are intended to reduce air emissions from key industrial sectors. Figure 2.1 presents the percentage contribution to total national air emissions by sectors of the economy. The charts present total emissions (sum of individual constituent air pollutant and greenhouse gas emissions) in order to broadly indicate the degree that economic sectors contribute to overall air emissions across the country. The largest sources of air emissions are among the most important contributors to Canada's economy. Figure 2.2 provides a breakdown of total national air emissions (sum of individual constituent air pollutant and greenhouse gas emissions) for key industrial sectors, including electricity generation, and indicates the broad degree to which individual sectors contribute to overall industrial air emissions across the country. Achieving Canada's goal of an improved, healthier environment requires working with industrial sources, including electricity generation, as they are significant contributors to overall air emissions across the country.

Figure 2.2: Percent of total Canadian industrial emissions of air pollutants (2002)
and greenhouse gases (2004). Source: Environment Canada

The Government intends to develop an integrated approach to regulations for key industrial sectors, including, but not limited to: fossil fuel-fired electricity generation; upstream oil and gas; downstream petroleum; base metal smelters; iron and steel; cement; forest products; and chemicals production. Together, these sectors contribute approximately half of Canada's air emissions.

The air emissions to be considered for proposed regulation could include: particulate matter; nitric oxide; nitrogen dioxide; sulphur dioxide; gaseous ammonia; volatile organic compounds; mercury; sulphur hexafluoride; carbon dioxide; methane; nitrous oxide; hydrofluorocarbons; sulphur hexafluoride and perfluorocarbons.

The Government is undertaking detailed consultations with provinces, territories, aboriginal peoples, and stakeholders, including health non-governmental organizations, on the development and implementation of regulations to reduce industrial air emissions. Initial consultations from fall 2006 to spring 2007 will focus on the development of the regulatory framework that will address both air pollutants and greenhouse gases. Issues to be addressed in these consultations will include the approach to target-setting, short-term emissions targets and timelines, compliance options, and compliance assessment, monitoring and reporting. The Government's intent is to reach a decision, by spring 2007, on the overall regulatory approach, including proposed short-term targets for air pollutants and GHGs to be reflected in the proposed regulations to come into effect in the 2010-2015 timeframe.

During the period from fall 2006 to spring 2007 the Government is seeking input into the development of a proposed regulatory framework that will guide the development of industrial sector regulations.

The Government invites all interested and affected parties to provide their comments and responses to the key questions contained in this companion document to the Notice of Intent to Develop and Implement Regulations and Other Measures to Reduce Air Emissions. The development of the regulatory framework will be guided by the principles stated in the Notice of Intent, and will address elements for short-term emissions targets and timelines, compliance options, and compliance assessment, monitoring and reporting. Ministers may request additional information from sectors to assist with the analysis leading to the development of proposed regulations.

Comments are welcome during the consultations and the comment period occurring through early November to mid-December 2006. A summary of all written comments will be posted on the CEPA Registry, and comments received will feed into the development of further discussion documents as they evolve, and into the Government's decision-making process. Following the comment period and after review of the comments received during the October-December phase, the Government will prepare a draft regulatory framework.

Further consultations will be initiated in winter 2007 on the draft regulatory framework, which will be posted on the CEPA Registry. The Government's intent is to finalize the regulatory framework, including proposed short-term targets for air pollutants and GHGs, having given full consideration to comments received, by spring 2007.

Beginning in summer, 2007, the Government will engage in consultations on applying the newly-established regulatory framework to the development of regulations for individual industry sectors. These consultations will assist in determining how to translate the short-term targets identified in the prior consultations into effective proposed regulations, including timelines for implementation.

The Government intends to begin publishing initial proposed sector regulations in Canada Gazette, Part I, starting in spring, 2008. It is the Government's intent to finalize regulations for initial industry sectors no later than fall, 2008, and to finalize all regulations for all sectors no later than the end of 2010. This timeline for completing the full regulatory process recognizes that each sector has unique characteristics to be considered in developing regulations such that the length of development time may vary from sector to sector.

Initial provisions of the proposed regulations would come into force by the end of 2010, with the balance of the provisions coming into force as soon as possible thereafter.

The following questions serve as focal points around which elements of the regulatory framework will be developed and refined:

Question 1.How should emissions targets be determined? What roles should benchmarking and technology assessment play in a target setting approach? What are the key socio-economic considerations that should be taken into account?

Question 2. How should local or regional air quality issues be taken into account in setting targets?

Question 3. What are the considerations in determining whether different target-setting approaches could be utilized for new versus existing sources?

Question 4. What should be the short-term targets for air pollutants and GHGs? As targets will become more stringent over time, what would be the best approach to determine those targets? How far in advance should these targets be determined? Should such future targets be included in the regulations?

Question 5. What elements are needed to ensure that an emissions trading mechanism functions effectively?

Question 6. Should an emissions trading system be limited to domestic trading? What would be the advantages and disadvantages, and additional considerations, of enabling cross-border trading with the United States?

Question 7. Should a domestic offset system be developed as a compliance option for reducing some or all air emissions? If so, should offsets be restricted to certain activities or sectors?

Question 8. Should a system of "opt-ins" be implemented to facilitate the voluntary participation of non-regulated entities?

Question 9. Should a mechanism be established to encourage early action by industry before targets take effect?

Question 10. What mechanisms could be used to stimulate technology development and deployment? How could a technology investment fund best be structured?

Question 11. Are there other compliance options that should be considered for some or all air emissions? Under which circumstances should they be considered?

Question 12. How should a one-window air emissions reporting system be established? Could an existing mechanism be used to guide its development?

The Government recognizes that human health and the environment continue to be affected by air pollutants and GHG emissions. Reducing air emissions is a matter of national concern; Canada commits to take measures that reduce these emissions to achieve tangible benefits to the health of Canadians and to the environment. In developing this framework, there are a number of elements and associated options to consider, including but not necessarily limited to: emissions targets and timelines, compliance options, and compliance assessment, monitoring and reporting.

A key feature of the proposed regulations is that they would establish emission reduction requirements for both air pollutants and greenhouse gases in an integrated manner. Targets will be set to address the key air emissions from each sector. The targets and timelines for each sector will be the subject of ongoing analytical work and consultations.

As stated in the Notice of Intent, the following principles will guide the Government's approach to setting targets and timelines:

• achieve measurable reductions in air pollution that will produce health and environmental benefits;
• reduce air emissions from all sources with a balance of effort among industry sectors and consumers;
• establish air emissions targets that are consistent with leading environmental standards and are at least as rigorous as those in the U.S.
• maximise environmental gains through an integrated, multi-pollutant approach;
• maintain Canadian competitiveness and reflect the opportunities offered by the capital investment cycle in the regulatory requirements; and
• provide regulatory certainty for industry.

For the short-term (2010-2015), the Government intends to adopt a target-setting approach based on fixed caps for air pollutants. The Government is committed to emissions targets at least as rigorous as those in the U.S. or other environmental performance-leading countries.

For GHGs in the short-term, the Government intends to adopt a target-setting approach based on emissions intensity, one that will yield a better outcome for the Canadian environment than under the plan previously proposed on July 16, 2005 and show real progress on the environment here in Canada.

Question 1.
How should emissions targets be determined? What roles should benchmarking and technology assessment play in a target setting approach? What are the key socio-economic considerations that should be taken into account?

The proposed regulations will set realistic air emission targets designed to reduce emissions across the country to achieve tangible benefits to the health of Canadians and to the environment. These targets would have timelines that encourage emitters to take into account the coordinated requirements in their capital stock investment decisions.

Because air pollutants and GHGs share many common sources, coordinated requirements would allow sources to make capital investment decisions that maximize synergies and cost-efficiencies among options to reduce air pollutants and GHGs. In order to maximize potential health and environmental benefits and minimize the potential for inadvertently increasing some air emissions, the Government's approach will be to take comprehensive action on all air emissions in order to find an optimal solution for mitigation of both issues. An integrated nationally consistent approach will enable industry to contribute to improving air quality and environmental outcomes in an efficient and effective manner.

In setting air emissions targets, it will be possible to build on the experiences of Canada's trading partners and other jurisdictions. In particular, it would be beneficial to look towards other jurisdictions with leading environmental and economic performance to identify demonstrated performance levels that have been achieved from the application of leading technologies and practices. Determining specific targets could be informed by benchmarking current emissions performance (i.e., emissions intensity or emissions performance index) against similar facilities or sectors in countries with leading environmental and economic performance.

Determining specific targets could also be informed by detailed analysis of current processes and technology currently in place in industrial sectors in Canada, and an assessment of leading technologies available for reducing air emissions. This would provide a measure of what emissions reductions could be achievable with implementation of these technologies in Canada.

Socio-economic considerations are an important input to a target setting process and to development of the optimum strategies for reaching targets. Considerations include issues of equity and regional distribution of costs and benefits.

Question 2.
How should local or regional air quality issues be taken into account in setting targets?

For air pollutants, setting targets involves some additional considerations due in part to the complex relationship between emissions, ambient air quality, and health and environment effects. The Government will establish targets and timelines which measurably reduce the impact of air pollutants on the health of Canadians, particularly the most vulnerable (children, the elderly, and those with pre-existing cardio-vascular and respiratory diseases). Current health evidence indicates that in all parts of the country, improvements in air quality would result in health benefits. However, the relationships between emissions, ambient air quality and eventual effects are complex and non-linear and will vary from region to region. The targets and timelines will also measurably reduce the impact of air emissions on the environment. As such, current and predicted ambient air concentrations and ecosystem-based critical loads for air pollutants contributing to smog and acid rain, and impacts on population health (i.e. pollutant exposure and potency), are relevant factors in setting targets.

Question 3.
What are the considerations in determining whether different target-setting approaches could be utilized for new versus existing sources?

In some regulatory schemes, new facilities face more stringent targets than existing facilities on the grounds that they have access to newer, more efficient technology from the outset of the capital planning stage. The concept of "best available technology" can play a role in setting targets.

Investment in new or replacement capital offers particular opportunities for achieving significant environmental improvement while maintaining competitiveness, since capital stock turnover generally allows for emission reductions to be achieved at much lower cost than through "end-of-pipe" approaches.

Existing plants potentially face additional costs (particularly due to production down time and attendant lost revenues) associated with retrofitting new technology to an existing process.

There is some evidence that the approach of "grandfathering" existing facilities can lead to situations where, rather than replacing older more polluting equipment, companies extend the use of those existing facilities rather than making the new investment and being exposed to more stringent targets.

Options to assist in bridging the time gap between investments (e.g. through emissions trading) and in promoting technology development and deployment are discussed below.

Question 4.
What should be the short-term targets for air pollutants and GHGs? As performance improves with new investment, and targets become more stringent over time, what would be the best approach to determine those targets? How far in advance should these targets be determined? Should such future targets be included in the regulations?

The Government has committed to reduce air emissions from all sources with a balance of effort among industry sectors and consumers. The air emissions targets that will be established will be consistent with leading environmental standards and at least as rigorous as those in the U.S.

In the case of air pollutants, the Government has committed to adopting a target-setting approach based on fixed caps for the short-, medium- and long-term. There are different options for setting the level of those caps, and for distributing the caps across sectors and plants within a sector.

In the case of GHGs in the short-term, the Government has committed to an emissions intensity approach that will yield a better outcome for the Canadian environment than under the plan previously proposed on July 16, 2005 and show real progress on the environment here in Canada. There are different options for setting emissions intensity targets across sectors.

In order to minimize the costs to industry of complying with the proposed regulatory requirements, a number of compliance options will be considered. The objective is to ensure that tangible health and environmental benefits are achieved while providing industry with the flexibility to choose the most cost-effective way to meet its obligations.

The Government's approach to compliance options will be guided by the following principles:

• Incorporate flexible compliance mechanisms, including self-supporting market mechanisms that are not reliant upon tax-payer dollars;
• Maintain Canadian competitiveness and reflect the opportunities offered by the capital investment cycle in the regulatory requirements;
• Promote investment in the development and deployment of new technologies.

Question 5.
What elements are needed to ensure that an emissions trading mechanism functions effectively?

The Government is considering the use of emissions trading systems for some air pollutants (NO_X and SO₂) and greenhouse gases. While trading between air pollutants and GHGs is not feasible, separate air pollutant and greenhouse gas emissions trading systems could co-exist.

Emissions trading can help companies to align emissions requirements with their expected timelines for capital investments, and to take advantage of the fact that other companies may have lower costs of emissions abatement.

In a trading system, the market places a value on emissions reductions - represented by the price of a tonne of emissions – which provides a financial incentive for developers of both new or alternate technology and control equipment manufactures to develop technologies that reduce emissions beyond current capabilities. A trading system also provides emitters with a financial incentive to change processes and or operating practices that result in emissions below what they would otherwise have been.

Evaluating options for an emissions trading system for air pollutants would take into consideration how trading would impact local and regional air quality with a view to protecting the health and environment of Canadians.

Experience with emissions trading systems, such as the U.S. Acid Rain Program, the U.K. Emissions Trading Scheme and the U.S. Lead Phase-out program, has shown that emissions trading systems can lead to emission reductions at lower costs than traditional command-and-control regulations and can accelerate the achievement of the environmental objective. In addition, emissions trading systems can provide financial incentives, through the market, for technology development and deployment.

Question 6.
Should an emissions trading system be limited to domestic trading? What would be the advantages and disadvantages, and additional considerations, of enabling cross-border trading with the United States?

For air pollutants, the Government is considering domestic inter-firm trading, either sector-specific or cross-sectoral, where firms could receive credits for outperforming their target, and these credits could be tradable among firms.

The Government is also prepared to explore opportunities for cross-border air pollutant emissions trading with the U.S. for the fossil-fuel electricity generating sector. This would mean, at a minimum, capping electricity generating units at comparable levels to the U.S. and developing consistent emissions monitoring and reporting requirements as the basis for Canada-U.S. cap and trade. A joint Canada-U.S. study, published in July, 2005 demonstrated the feasibility of cross-border trading of air pollutants within the electricity sector and concluded that acid rain and smog levels would improve across Eastern North America if emissions in the electricity sector were capped in Canada at levels comparable to those in the U.S., and that trading among the electrical power plants would maintain the overall level of emission reductions, while lowering the cost to industry of meeting the cap. The analysis and conclusions were shared across Canada with provincial governments, industry and stakeholders.

For greenhouse gases, the Government is considering a domestic multi-sectoral trading system, and potentially international linkages. However, the Government will not purchase credits nor otherwise participate in any emissions trading market.

Question 7.
Should a domestic offset system be developed as a compliance option for reducing some or all air emissions? If so, should offsets be restricted to certain activities or sectors?

The Government is interested in hearing views on the potential for using offsets as a compliance option. Offsets are reductions in air emissions achieved outside of the regulated sector that counterbalance or "offset" the emission reductions required of regulated entities. Offsets must result in real, quantifiable and verifiable emissions reductions supporting the desired health and environmental outcomes, and be incremental to any other regulatory obligation to reduce emissions from the offset activity.

Offsets are most applicable for those emissions, such as greenhouse gases, where the location of the emissions reduction does not affect the environmental objective. Where offsets make environmental sense, the availability of emission reductions outside of the regulated sectors and activities could provide companies with a lower cost option for meeting their regulatory obligations. For air pollutant emissions, where local health and environmental effects are important, the scope for offsets as a compliance option may be more limited, though they have been used in some instances. For example, offsets for nitrogen oxide (NO_X) emissions targets have been used in California's RECLAIM program and in the implementations of the U.S. NO_X Budget trading system by some states.

Question 8.
Should a system of "opt-ins" be implemented to facilitate the voluntary participation of non-regulated entities?

The Government is interested in hearing views on the potential for using "opt-ins" to facilitate the voluntary participation of non-regulated entities.

"Opt-ins" are entities that do not have a legal requirement to achieve a regulatory target but that choose to voluntarily adopt targets. Opt-ins could be a vehicle for municipalities and other non-regulated entities. Opt-ins could include entities in a regulated sector that emit below the threshold for coverage by the regulations but choose to adopt the targets. Entities that exceed targets could earn and sell allowances, but would not be penalized for failing to meet targets. For "opt-ins" from sectors not covered by the regulations, targets would have to be established.

Question 9.
Should a mechanism be established to encourage early action by industry before regulatory targets take effect?

The Notice of Intent promised to explore a mechanism to recognize early action. Specified actions taken to reduce air emissions prior to when targets apply to a sector could be recognized for future compliance purposes, up to certain limits. Companies could be given allowances to be carried forward into future years or the right to receive allowances in future. Establishing allowances or rights that can be sold could help improve the economics of early investment in emissions reduction.

Question 10.
What mechanisms could be used to stimulate technology development and deployment? How could a technology investment fund best be structured?

To achieve ongoing and significant emission reductions, new capital investment, new technologies and technology breakthroughs are needed. A number of potential technology breakthroughs can be identified, such as clean coal, fuel cells, or carbon capture and storage. The Government will consider promoting investment in the development and deployment of such innovative technologies through a number of mechanisms, including the regulatory framework.

While regulated emission reduction targets can be expected to encourage technology development and deployment, innovation can also be encouraged in other ways. One key mechanism that will be considered as a means to facilitate industry compliance with the regulatory system will be the possible establishment of a technology investment fund into which industry and potentially governments could contribute resources to support the development of transformative technologies that have the potential to result in significant, long-term emission reductions, such as carbon dioxide (CO2) capture and storage. Consideration could be given to providing compliance credit to companies that made investments in such technologies or contributed to such a technology fund. Preferential treatment could be given to technologies that reduce emissions of multiple pollutants.

Question 11.
Are there other compliance options that should be considered for some or all air emissions? Under which circumstances should they be considered?

In the discussion above, several compliance options that have been used or proposed for use in regulatory systems were described. Views are solicited on whether there may be other options that should be explored.

The environmental and economic integrity of the air emissions regulatory approach will require rigorous monitoring and reporting of air emissions, and subsequent reporting of results and progress to Canadians. The Government intends to deliver significant emissions reductions and is committed to ensuring, through emissions monitoring and fully transparent and accountable reporting, that these emission reductions occur on schedule.
The Government's approach to compliance assessment, monitoring and reporting is guided by the following principle:

• ensure effective and efficient monitoring, reporting and regulatory implementation, including best efforts to minimize overlap and regulatory duplication

The Government intends to require maximum use of continuous emissions monitors to quantify emissions and intends to implement a one-window regulatory compliance tool, in collaboration with provinces and territories, to ensure that industry is on track to meet regulatory obligations, as well as limit regulatory overlap. The development of rigorous monitoring requirements, including the specification of quantification protocols, would be undertaken in consultation and would be set in the regulations.

Question 12.
How should a one-window air emissions reporting system be established? Could an existing mechanism be used to guide its development?

The current reporting system for air pollutants, the National Pollutant Release Inventory (NPRI), is used for the purposes of reporting on Canada's domestic and international commitments. The system is not intended for the purposes of assessing compliance with regulations.

Current GHG reporting requirements are used primarily to enhance Canada's GHG inventory. The existing system is not intended as a regulatory compliance tool.

The Government recognizes that the monitoring and reporting requirements that are established will need to take into account the needs of an eventual emissions trading program.

The National Steering Committee on Reporting (NSCR), a federal, provincial, and territorial government committee, was established in 2003 to provide advice on the development of a single, harmonized system for mandatory reporting of greenhouse gas emissions and related information with the objective to:

• support proposed federal regulations of greenhouse gas emissions;
• meet provincial and territorial legislative and other reporting requirements for greenhouse gases emissions and related information;
• increase the level of detail of the National Greenhouse Gas Inventory; and
• provide Canadians with information on greenhouse gas emissions.

NSCR is co-chaired by the federal government and Alberta. It works in consultation with stakeholders through a Stakeholder Advisory Committee (SACR). To ensure broader involvement of stakeholders, the NSCR also established a number of technical working groups (TWGs) to address specific issues, and has organized national consultations for key reporting and quantification issues.

Upon completion of the development phase, the Government intends to work in partnership with the provinces and territories in implementing the regulatory framework. Where possible and appropriate, the government would seek to enter into Equivalency or Administration Agreements with interested provinces, territories and aboriginal governments to avoid regulatory overlap and duplication.

The Government's approach to equivalency and administration agreements is guided by the following principle to:

• work in partnership and respect shared responsibility amongst all orders of government

The proposed Canada's Clean Air Act would further enable the use of equivalency provisions in CEPA 1999 by enhancing their flexibility. First, the five year limitation on the lifespan of these agreements would be removed and replaced by a more flexible approach for determining the term of agreements. Secondly, the qualification criteria would be made more flexible such that an Equivalency Agreement could apply to provincial, territorial and aboriginal permitting and licensing regimes if the effect produced is equivalent to that of a proposed federal regulation. The latter provision would accommodate the fact that jurisdictions frequently use permitting or licensing systems rather than regulations as a means to establish air emissions limits for specified facilities.

Ministers may also enter into Administration Agreements with provinces, territories and aboriginal governments to streamline the administration of federal programs, statutes and regulations. Administration Agreements usually encompass inspections, enforcement, monitoring and reporting, and other operational elements, with each jurisdiction retaining its legal authorities and accountability.

Where another jurisdiction's regime achieves the same level of protection for the environment as the proposed federal regulations, development of equivalency agreements could take place in parallel with the development of federal regulations. Such equivalency agreements would take effect on the same day that the federal regulations would come into force, thus allowing for a single regulator in any given jurisdiction. Equivalency and administrative agreements could also be negotiated after the federal regulations have come into effect.

Proposed Equivalency or Administration Agreements would be published in the Canada Gazette Part I for a 60-day comment period. Once finalized, they would be published in Canada Gazette Part II. In the case of Equivalency Agreements, an Order would also be published in Canada Gazette Part II declaring which proposed federal regulation would no longer apply as a result of the agreement.

In the medium-term (2020-2025), the Government will continue to employ a fixed cap approach to target-setting for air pollutants. For GHGs, the Government will build upon the emissions intensity approach with targets that are ambitious enough to lead to absolute reductions in emissions and thus support the establishment of a fixed cap on emissions during this period, while maintaining Canadian industry competitiveness and taking into consideration the outlook for Canadian economic growth.

For the long-term (2050), the Government will continue to employ a fixed cap approach to target-setting for air pollutants. For GHGs, the Government is committed to achieving an absolute reduction in GHG emissions between 45% and 65% from 2003 levels by 2050, and will ask the National Round Table on the Environment and the Economy (NRTEE) for advice on the specific target to be selected and scenarios for how the target could be achieved, including the role of technology and capital stock renewal.

In addition, the Government will ask the NRTEE for advice on:

• National objectives for ambient air for particulate matter and ozone for the periods of 2020-2025 and 2050; and
• National emission reduction targets for 2050 for total emissions of sulphur dioxide, nitrogen oxides, gaseous ammonia, volatile organic compounds, particulate matter for the following sectors: oil and gas, electricity, base metals, iron and steel, aluminum, cement, chemicals, forest products, transportation, consumer products, commercial and institutional, residential and agriculture.
• Medium-term emission reductions targets for 2020-2025 for GHG emission reductions for the sectors named above.

In providing this advice, the NRTEE will also be asked to examine the medium and long-term targets and policy approaches under consideration or implementation in other countries.

The Government will consider the recommendations and conclusions of the NRTEE in developing targets for the initial regulatory period, as well as medium- and long-term objectives for air emissions. The Government will retain the sole responsibility for developing regulations and finalizing targets.

This document represents the first phase of consultations on the regulatory framework. Please submit any written comments, addressed to the Department of the Environment, and sent to the Director General, Strategic Priorities Directorate, Environmental Stewardship Branch, Environment Canada, Place Vincent Massey, 351 Saint Joseph Boulevard, Gatineau, Quebec K1A 0H3. A summary of comments will be posted on the CEPA Registry.