EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 18, 1995

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[Translation]

The Chairman: Good morning everyone. We're going to proceed with the examination of Bill C-94, An Act to regulate interprovincial trade in and the importation for commercial purposes of certain manganese-based substances.

I'm being told that a committee member wants to raise a Point of Order. Mr. Chatters, you have the floor.

[English]

Mr. Chatters (Athabasca): I have several points of order on which I would like some clarification just before we get started.

First, this bill has been sponsored by the Minister of Environment, yet it has direct impact on several other departments of government like Natural Resources, Industry Canada and Transport Canada because of the impact this bill could have on those departments. Were each of those departments invited to appear as witnesses? Did they decline to appear as witnesses? Those are my general questions on that one.

Secondly, I understand that Ethyl Canada Inc. will be the second-last witness to appear before the committee, followed by the Association of International Automobile Manufacturers of Canada. I would like to know why Ethyl was not granted the last appearance, as it had requested in writing to the chair of the committee, simply because the passage of this bill has such a potential impact on Ethyl. In fact, it will mean the disappearance of the company in Canada and the loss of jobs accompanying that. Yet it was not given the opportunity to appear last. Even if the bill is defeated, the worst thing that could happen to the international automobile manufacturers is that they'll probably add a couple of lines in their auto manuals.

Finally, it is my understanding that the chair had letters of intent to appear from four outside consultants, Alison Pollack from Environ; Fred Hochberg, Harvard University; Ken Crump, ICF Kaiser; and Joseph Zayad, University of Montreal. I believe it's important that the committee have a chance to hear from experts and someone other than Ethyl or the MVMA. Will the chair allow these four witnesses to appear before the committee?

The Chairman: These are all very fair questions and I will attempt to answer them very briefly.

The Departments of Industry and Transport are headed by a minister who is a member of cabinet and who has vetted and approved the bill before us. Therefore the departmental endorsement is implicit in the fact that the bill is before us here today. There is one lead minister who is usually responsible for the bill she or he proposes, and at this stage we feel there is no urgent need to hear other departments on this matter.

The request by Ethyl Canada, has been the object of considerable conversation between the clerk and me. In this particular bill there are two major industrial interests, let's say. One you have identified; the other one is the automotive.

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We therefore felt that to achieve the highest possible degree of fairness, rather than facing the impossible decision of placing both as second, as they both wanted, we would have them both at the same time, the same morning, in sequence, in the same room. That way none would have an advantage over the other within that morning.

However, one of the two would have to be second - inevitably. The question was, would we have them both at the table at the same time or would we have them consequently?

That matter was resolved very quickly, Mr. Chatters, because the delegations are too large to have them both at the table. So when that day will come, when both will appear on a Thursday morning, I will invite them to flip a coin to determine who should be the second. That way they will have had the greatest possible degree of fair treatment we can accord.

Finally, on experts, at this stage it seems to us premature to go to experts who would probably be competent from a medical and health point of view without provoking another wave of experts on the other side of the issue. Therefore, it is a matter I am reserving, and on which perhaps I will consult a smaller group - let's say a steering committee of this committee - at a later date if we see that it is a matter we should explore further.

But I will take into account your comments. I am very grateful you raised this point.

Mr. Chatters: Just as a follow-up - and I find your answers very acceptable - on the first point, the Environment being the lead department, and that being your reason for the other departments not appearing, then I would question why Health Canada is on the list to appear.

The Chairman: It was a request made by your colleague Mr. Forseth. We otherwise would not have included it.

Mr. Chatters: Okay. Thank you, Mr. Chairman.

[Translation]

The Chairman: Mr. Pomerleau, do you have a Point of Order?

Mr. Pomerleau (Anjou - Rivière-des-Prairies): No.

[English]

The Chairman: Before starting this series of hearings I would like to express a couple of thoughts - and I apologize to the witnesses - to somehow put on record some reflections on the nature of this bill. It seems to me it is worth while transcending the substance of the bill to develop a couple of observations.

To me, this is a bill that touches on issues of technical progress and of consumer protection. It is a bill that deals with the daily operation of millions of Canadians of their automobile, and it has to do with the potential failure - or premature failure - of the emissions systems of new models. If that were the case, it could lead to unnecessary repair costs.

It is a bill for which the data and the analyses are coming only from one company making one product and another company making another product. It is an unusual alignment of powers.

It is a bill that has been brought forward to us because there is no independent viewpoint on this matter, or independent studies carried out, that would transcend the view of one side or the other. This is why we have the bill. The independent judgment is being exercised by the government itself on behalf of the public, having no other recourse available, and after lengthy consultations and prodding of the parties affected to come to a resolution themselves - So evidently there is a point when the public interest must be taken care of, and the bill attempts to reflect the public interest.

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We certainly wouldn't want a reduction in the warranty coverage of Canadian automobiles, and we wouldn't want to expose owners to the risk of increased warranty repair costs either. Evidently we are dealing also with an issue of consumer protection, no doubt.

Having said all that, we are fully aware that we are going to cross a very difficult river here, but we'll do it with the best of our knowledge, guided by the fact that we have to take to heart the interest of the public.

If I am wrong in my analysis, I would be glad to hear from colleagues to the contrary in subsequent meetings. I welcome their observations or reflections.

In the meantime I will proceed by welcoming the two delegations from the two departments before us. I will ask the leader of the Environment Canada delegation, Mr. Clarke, to introduce his colleagues, and someone else will introduce the other group. I urge you to give us the benefit of your views.

Mr. Tony Clarke (Assistant Deputy Minister, Environmental Protection Service, Department of the Environment): Thank you, Mr. Chairman. With me is Ellen Fry, who is a general counsel; Frank Vena, chief of the transportation division; and Rod Raphael, with Health Canada.

I don't have an opening statement, Mr. Chairman, but I could make a few comments. I will not repeat what you have said, but will simply say that the matter of MMT has, in a sense, been under discussion since the early 1980s. It intensified in terms of negotiations between the U.S. and Canada and the various parties in the early 1990s. It intensified to a large extent because of the 1996 models and the fact that new on-board diagnostic systems were about to be introduced.

With respect to the Motor Vehicle Manufacturers' Association, it was very clear that they thought they had evidence showing that the OBD systems would be affected by MMT. They made that very clear to us. They gave the studies and they held seminars with us. They also indicated that they were concerned about the various liabilities that would arise, new warranty programs, because of the use of MMT. They were so concerned that they talked about the fact that they might even disconnect this new technology. That was not terribly satisfactory to Environment Canada because we thought we should have the same new technology that they have down in the States. There would be environmental protection. The OBD-II systems act a lot like the inspection and maintenance programs on board. So from that standpoint we were quite concerned.

On the other hand, Ethyl Canada has done a lot of work and they were equally clear. They showed that this product did not affect the OBD-II systems; in fact, it was even good for the environment in the sense that NOx was reduced in terms of the tailpipe emissions.

We tried very strongly for two years to get the two parties together, which they did. They got together to try to find a resolution to this problem. We thought it would be great if the government could step out and these two industrial groups could resolve their problems. That certainly didn't happen, and basically time ran out from the standpoint of the 1996 model year.

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We did have a couple of independent people in the private sector look at both the analyses we got from Ethyl and the analyses we got from several of the motor vehicle manufacturers. We got an opinion from them. They leaned towards the MVMA side of things; they said to err on the side of caution. It was a slightly positive opinion leaning towards the car industry.

From that standpoint also there was a call for an independent study and an independent panel. We didn't see the value of an independent panel. Quite frankly, the timeframes were running out on us.

All of this led to the introduction of a bill, and here we are today.

That's a very brief background. I'm not sure if you would like the highlights of the bill. If you do, we can do that very quickly for the committee, or we can simply go into questions.

The Chairman: Is there any comment by Health Canada?

M. Rod Raphael (Chief, Monitoring and Criteria Division, Department of Health): Basically, Mr. Chairman, the involvement of Health Canada has been what Mr. Clarke has described as a consultant to various departments looking at the MMT issue. In 1994 we produced our latest assessment of the toxicity and exposure of manganese products coming from MMT used in gasoline. I believe the committee has been given a copy of the report as well as the summary documents.

We too would be quite happy to go into questions. We don't have any more statement to make.

The Chairman: For the benefit of new members of this committee, why don't you give a quick review of the highlights of the bill.

[Translation]

Mrs. Ellen Fry (General Counsel, Legal Services, Department of Justice): The Bill aims at allowing interprovincial trade and import for commercial purposes of MMT or of any substance containing MMT when that substance is intended to be added to unleaded gasoline.

[English]

The heart of the bill is clause 4, which bans importing and interprovincial trade in substances that are covered by the bill, unless this is specifically authorized by the minister. Aside from clause 4, the rest of the bill is largely technical support provisions to give effect to clause 4, which as I said is the heart of the bill.

What does the bill cover? It covers MMT and any substance that contains MMT. There is a power to extend the act by Order in Council to cover other manganese-based substances if it is required, although we're not aware of any need to do so at the present time.

In order to make a decision as to whether the bill should be extended to cover other substances, clause 11 gives the minister the power to obtain various pertinent information from third parties to help in the decision-making.

It is also possible to get an exemption from the application of this bill if a person wanted to import or do interprovincial trade in MMT, if that person is able to satisfy the responsible minister that the MMT in that particular case would not be used for unleaded gasoline. There are various provisions in clauses 5 to 10 of the bill that outline the rules that would cover any such authorizations, conditions, posting security, reporting requirements and so on.

If any person violates the act in any way after passage, that would be an offence subject to prosecution. All the enforcement provisions in this bill were taken, to the extent relevant, from CEPA, so there is no inventing the wheel here.

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As for the maximum penalties under this bill, which are equivalent to CEPA penalties, there are basically three categories of penalty. For unauthorized import or interprovincial trade in MMT or a controlled substance, there is a maximum of $300,000 and/or six months in prison if it proceeds by summary conviction; a maximum of $1 million and/or three years in prison if it proceeds in the more serious way, by indictment. If a party, on the other hand, knowingly were to provide false or misleading information to the minister in administering this act, the absolute maximum penalty in procedure by indictment would be five years instead of three years, as I mentioned in the preceding category of penalty. Any other offence under the act carries a maximum of $200,000 and/or six months in prison as its penalty, and would proceed in the less serious method of criminal proceedings, which would be summary conviction.

There is also a capacity, as there is in CEPA, if a person is convicted of an offence under this act, for the court to make additional orders in addition to the base penalty. For example, if profits or other monetary benefits are made as a result of violating the act, the court could increase the fine accordingly. The court could prohibit conduct that would likely result in a repeat offence. It could direct various remedial action. It could direct publication of information concerning the conviction of the person under the act, and so on.

There's also a capacity, as there is in CEPA, for civil causes of action, where third parties who suffer loss or damage as a result of someone who violated the act could sue the offender and collect damages.

The remainder of the act is largely what I would call enforcement powers - that is, powers for inspectors under the act, things like the fact that directors in certain circumstances can be prosecuted for offences by their corporations, and so on. These appear in clauses 12 to 19 and again, to the extent relevant, they were simply taken out of CEPA.

That's obviously a very brief summary. If there are more detailed questions, we can respond. Thank you.

The Chairman: Thank you.

Having heard this presentation,

[Translation]

Mr. Pomerleau, would you like to ask questions?

Mr. Pomerleau: One single question for starters: Mr. Clarke, you said that you met the representatives of Ethyl Canada Inc. and also of the Motor Vehicle Manufacturers Association. Did you also meet the oil companies and, if that's the case, what was their position on MMT?

[English]

Mr. Clarke: We met often with the oil companies and with Ethyl and with the MVMA. We met with everyone with whom we had to meet and we listened to all sides.

The oil companies basically want to maintain the use of MMT in gasoline. They believe it is a good product in terms of an octane enhancer and booster. They also believe it does not cause a lot of environmental damage. They were very, very resistant to the removal of MMT from gasoline.

[Translation]

Mr. Pomerleau: Did the oil companies state that removal of MMT and its replacement by another additive would trigger an increase of the cost of gasoline production?

[English]

Mr. Clarke: The oil companies were of the opinion that the use of MMT was their least-cost option. They did not want to replace MMT. Was that the question?

Mr. Pomerleau: Yes.

Mr. Clarke: That was their preferred choice of the additive, MMT.

Mr. Frank Vena (Chief, Transportation Systems Division, Air Pollution Prevention Directorate, Department of the Environment): Maybe I could add a few words to that, Mr. Chairman.

The petroleum industry did indicate that there would be a cost to the removal of MMT. The figures put forward by the industry - and to some extent these are still being refined - would suggest that the cost for that could run up to $83 million for the industry as a whole.

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Our understanding is that this would translate - I think the range is anywhere from $50 million to $83 million for the replacement of MMT. That cost would translate anywhere from a tenth of a cent to a quarter of a cent per litre increase in the production cost of gasoline.

What that means in the retail market is obviously a different question, but that's their production cost.

Mr. Pomerleau: But there will be a raise.

Mr. Vena: There will be an increase. If the increase were to be what the increase in production costs are, then that could translate into $2 or $3 extra per year for a consumer to buy gasoline.

Again, we stress that we don't know what that means in the retail market.

The Chairman: Mrs. Kraft Sloan.

Mrs. Kraft Sloan (York - Simcoe): Thank you very much, Mr. Chairman.

I'd just like to clarify what you said. You said it might end up costing the consumer $2 or $3 a year for the extra cost in the gasoline. How much would it cost the consumer for the problems they'd have associated with their automobiles?

Mr. Vena: That obviously depends on some warranty considerations. Some motor vehicle manufacturers obviously are concerned about the risk to increased warranty costs. If MMT does impact on their on-board diagnostic systems, their oxygen sensors, as some manufacturers have put forth - The question of spark plugs has been brought out as well. Obviously those costs are also important. I think all of us are aware when we go and see a dealer what certain costs are and what that could imply.

That's the other side of the issue, obviously. I was just trying to focus on whether if that were the increase, a tenth of a cent to a quarter, for someone driving 10,000 miles a year, what that cost would be with respect to gasoline. The other side of the coin is obviously always there.

Mrs. Kraft Sloan: But it's far more significant on the other side than $2 or $3.

Mr. Vena: I think that depends on some of the warranty costs. I think some of the motor vehicle manufacturers could probably share more of that data with you in a general sense.

Mrs. Kraft Sloan: What alternatives to MMT are available to be used as octane enhancers in unleaded fuels?

Mr. Vena: The fuel industry can use a number of alternatives. They can do additional refining. In essence, they could produce more alkylate, if you like. They have other alternatives where they could add different types of materials. There are other materials on the market that act as octane enhancers. Some of these are really also compounds that contain oxygen, such as ethers. One that's commonly used in the U.S. is methyl tertiary butyl ether, which also has octane-enhancing properties. You could go to ethanol as well. Ethanol is an alcohol that contains oxygen.

So a number of alternatives are available to the fuel industry to meet their octane requirements.

Mrs. Kraft Sloan: If I understand you correctly, you can change the gasoline when you're refining it or you can add another octane enhancer later in the process. Is that correct?

Mr. Vena: Yes. In essence, you can do things to the process or you can add after the processing. You can add compounds or substances that bring the octane level to where the gasoline is required to be, whether it's regular, extra or premium.

Mrs. Kraft Sloan: What is the cost to the industry in terms of either just changing the process at the beginning or making an addition later? Is one more cost-effective than the other?

Mr. Vena: Obviously that depends on how a particular refiner runs his industry, how he puts his big pots and kettles together to make gasoline. But in the figures that were reported to us with respect to that range of costs, it really took into effect those kinds of alternatives. Those numbers were provided to us by the petroleum industry.

Mrs. Kraft Sloan: Would it be safe to say in a general way that it would be cheaper to change it at source, or is it cheaper to add something later?

Mr. Vena: I think the industry would be better placed as to exactly how - MMT has considerable use in Canada because it is a cheap octane enhancer. That's its most attractive property. Most of the refiners do use it. When they refine the fuel it really depends on the crude they get and how they run their refinery at various times of the year. Sometimes it's more cost-effective to put a little less in. It depends how each refinery runs its industry.

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Mrs. Kraft Sloan: What are the environmental costs of changing the processing and the product at source or making the additions later? Can we make generalizations on that? Is that possible?

Mr. Vena: That's some of the concern that has been expressed, Mr. Chairman: when we remove MMT, what do the refiners have to do? If they have to do additional refining, then maybe they're burning more fuel or they're doing a number of things at the refinery where there could potentially be, from those point sources, an increase in pollution. In essence, a bit of that does occur.

To put it into context, if we're looking at increases in emissions, say, of nitrogen oxides that would happen from the combustion of fuel at a refinery, if recollection serves me right, I think a study done by Stanley Associates Inc., which was commissioned by Ethyl, indicates that NOx emissions may increase by less than 1%. If you're looking at CO2, one of the principal gases with respect to the greenhouse effect, I think it's less than a quarter of a hundredth of a percent.

So although there may be additional refining where some pollution from the point source may increase, in terms of a national context those numbers are really minuscule. I think those numbers are available in the report. Again, that was by Stanley for Ethyl, a corporation that wanted to understand what that could mean with respect to increased pollution.

Mrs. Kraft Sloan: I understand that benzene and toluene can be added at source?

Mr. Vena: Benzene and toluene are really part of the process. - [Inaudible - Editor] - not benzene itself, but a group of compounds of which benzene is one; they're called aromatics.

Mrs. Kraft Sloan: So they wouldn't refine it. They wouldn't take those out. They would just leave them in. Is that correct?

Mr. Vena: Those are in the fuel. Part of the refining process is to increase the aromatics content. That's a concern to us because one of the aromatics has just been declared toxic under CEPA - benzene. The Minister of the Environment has announced that we will be putting forward a regulation to ensure that benzene levels in gasoline are maintained at 1% average maximum across the country.

So in essence, we were concerned about the aromatics increase for a number of reasons, and that's being handled through a regulation on benzene.

Mrs. Kraft Sloan: Are the aromatics always going to increase or always be there?

Mr. Vena: Aromatics are essentially a major constituent of gasoline, yes.

Mrs. Kraft Sloan: Right, but by not using MMT, is there a way of getting around the increase of aromatics?

Mr. Vena: The aromatics and benzene element are being controlled through a regulation that's being developed as we speak. If you're asking whether, if we remove MMT, aromatics will go up, the answer is no. We are ensuring that benzene levels are going to be capped at 1% by volume maximum, a reduction from existing levels, and we're going to ensure that aromatics do not exceed an average value. So in essence we're not going to see an increase in toxic constituents from the benzene issue that are also octane constituents, if we remove MMT.

Mrs. Kraft Sloan: Thank you very much.

The Chairman: At this stage it's customary in this committee to inquire of the Reform Party whether they wish to put a question.

Mr. Chatters: Yes.

The Chairman: Then by all means go ahead, followed by Mr. Steckle.

Mr. Chatters: I have a number of questions, actually. I'll start off with Health Canada since they haven't had a question yet.

A December 6, 1994, a study called Risk Assessment for the Combustion Products of Methylcyclopentadienyl Manganese Tricarbonyl (MMT) stated that all analysis indicates that the combustion products of MMT in gasoline do not represent an added health risk to the Canadian population. That was on page 69 of the study. Do you support that position here today?

Mr. Raphael: Yes, we do. This study is based on the examination of the toxicological information on the oxides of manganese. In looking at the exposure component of the risk assessment, we've utilized data provided through the environmental monitoring stations operated by Environment Canada and some of the provincial agencies.

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With this information, we believe that statement is accurate. Based on a reference level which is the same as the one calculated by the United States Environmental Protection Agency, levels of exposure in Canada are far below levels at which we would be concerned with respect to health impacts. We've made that statement on that basis.

Mr. Chatters: Thank you.

Mr. Clarke, you mentioned attending a number of seminars and studies where you were given studies to show the problem that MMT caused with the OBD systems. Have those studies ever been tabled and provided to the public in general or to the Ethyl Corp. to examine?

Mr. Clarke: I'm not sure they have. Some of that information is confidential information and we would have to go through the access route to clarify whether it could be given out.

In fact, we did have a request from Ethyl. We did go through all of the studies and we did extract all the information that was not confidential. So at least the non-confidential part of the studies is out there in the public sector. There is confidential information that has been withheld.

Mr. Chatters: Okay. Could you give us an idea of the comparison of the failure rate of the on-board computer diagnostic systems in the U.S. where MMT does not exist in unleaded gasolines and the failure rate in Canada?

Mr. Clarke: I understand there are some problems. I'll ask Mr. Vena to deal with those.

Mr. Vena: With respect to the U.S. situation, Mr. Chairman, it's fairly complex technology, which has been introduced over the last number of years. I understand it does have a number of problems associated with it in terms of being fully functional.

There have been waivers provided to a number of manufacturers for the introduction of that technology. My understanding is that those waivers in the 1996 model year are no longer a common practice. A case-by-case study now has to be done and shown to the authorities before they can not have a fully functioning system on board.

Those systems are not very prevalent in Canada now. They're being introduced in 1996. Even the data that we do have is very limited data with respect to the on-board diagnostic systems. As for failure rates with respect to use - MMT versus non-MMT - in actual field data we really don't have very much in terms of what's out there simply because they are newer systems.

Mr. Chatters: Are you unable to provide us with a comparable failure rate with or without the use of MMT?

Mr. Vena: There are some studies that include some experimental data, and part of that was provided as part of the data we have. I think some of that has been shared through these access to information requests, but we don't have data from a lot of in-use practice with and without MMT for on-board diagnostics because it's not as if the systems have been prevalent in Canada for a lot of years.

Mr. Chatters: But please share the data that you have. How do they compare? How does the failure rate compare in the U.S. and in Canada?

Mr. Vena: I have only small parts of data that were provided to the department. In essence, what we have seen is that in a limited number of tests that data is still inconclusive. I think we've tried to put that issue forward. We don't have a lot of data on which to say a definitive yea or nay. Some of the data we do have has given us cause for concern and that's really where the statement is.

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Mr. Chatters: On that basis, why did you resist further independent study on the issue?

Mr. Vena: It was simply a question at the time of whether we could afford not to move on this issue, because these systems were coming into Canada. We had to have those systems in Canada. So from our perspective those are systems that provide us with a very important tool in terms of combating pollution. It was a judgment call on our part as to how to move forward.

Mr. Chatters: But you had no conclusive data to show that when those systems came into Canada their failure rate would be any different from what it was in the United States without MMT.

Mr. Vena: I think it's difficult. I don't know any failure rate data in the U.S. without MMT. I do know there were some concerns on introducing this equipment, because there were problems with its functioning. My understanding is that as of 1996 most of those systems in the U.S. are fully functional. That kind of data is not available to suggest there's a long history of failure with or without MMT.

Mr. Chatters: Okay. If I may, Mr. Chairman, let's go on to the issue of nitric oxide emissions. Studies provided to me by the Ethyl Corp. suggest that by banning MMT in gasolines the amount of nitric oxide emissions, tailpipe emissions, would increase somewhere in the neighbourhood of 20%. I heard you say you had a study that said an increase of 1% or less than 1%. Would you make that study available?

Mr. Vena: We have made that study available to Ethyl. In essence, we have been discussing how important that particular NOx issue is. The on-board diagnostic tool is one that measures the efficiency of the catalyst, so in essence what we're looking at is a tool that is there to reduce all the automotive pollutants. Nitrogen oxide, hydrocarbons, and carbon monoxide are principal ones.

Obviously we're interested in that whole soup coming out, and we have shared with Ethyl our methodology on what the NOx reductions could be if MMT is in the fuel. Most of that data has come from Ethyl. We have tried to understand the mechanism with them, and we don't know what the mechanism is.

There's speculation out there as to what could happen, but even more important to us - and I think to Ethyl as well - was that there appeared to be a reduction. They have tested how to take that reduction observed in their test fleet, which is run under very strict conditions to be able to do some of those durability tests, and see how that reflects in the real world. Obviously any reduction of emissions is important to us. We wanted to understand what that really was. We simply don't know very well how to take that test data and put it into real world data. That's where some of the differences are.

I think it's important, though, to try to put that into context, because it's really important to understand that if we're promoting a program to reduce pollution that's a very important question. The on-board diagnostic systems are there to alert you - a particular one anyway - when the catalyst system, which is the main component used in reducing emissions, is not functioning to a certain level. If it's not functioning well, hydrocarbon emissions, carbon monoxide emissions and even NOx emissions are higher.

Obviously it's up to us to understand what that could mean. I tried to put it into context for you. Mr. Clarke mentioned earlier that an inspection in maintenance programs was a tool to try to help us in that area.

Vehicles out in the real world degrade. They're designed to do certain things, but because of how we drive them they degrade, so over a period of time they pollute more than a designed feature. It's a very important question for us.

The Province of British Columbia, for example, has taken this to another level and has instituted an inspection and maintenance program as a requirement in the lower B.C. mainland. Vehicles come in to various stations and are checked with respect to how their pollution systems are working. If they find things that are wrong, and the pump or catalyst isn't working or whatever, they are then required to maintain the vehicle or make whatever change is required.

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They've assessed the value of doing that, in trying to limit pollution, and have found in their latest work - this is a report out of the B.C. environment ministry - that because of this program, carbon monoxide from the vehicle tested has been reduced by 20%. Hydrocarbons have come down by 24%. NOx emissions have come down by 3%. With CO2, which is a principal gas in terms of greenhouse gases, there has been a fuel economy increase of 5%.

In the overall scheme of things, that's what the system is meant to do. It's meant to alert you when your system isn't working well. Obviously, if you take the appropriate action, these are the kinds of benefits you can see. That's really the trade-off we had with respect to NOx for some reason showing a benefit with MMT. But if there are impacts on the on-board diagnostic system then that counterbalances significantly. That really was the issue.

The Chairman: We can come back on a second round. Now let's give a chance to Mr. Steckle, Mr. Wappel and Mr. DeVillers.

Mr. Steckle (Huron - Bruce): Mr. Clarke, some of the questions have already been partially asked and partially answered. I guess the ultimate objective of the whole process and what we're going through is to determine additives in our fuel systems that will at least give us the best conditions for all concerned, because we're talking about health in this issue.

I guess my first question, before I get to the health question, is what motivated the automotive industry on the on-board diagnostic systems, to determine that 1996 would be the year they would introduce that in automobiles in Canada? Given the fact that MMT may be reintroduced in the United States, and given the fact we still use it here in Canada, what would have motivated it to do that?

Mr. Clarke: I think this was a requirement of the Environment Protection Agency in terms of the tailpipe emissions standards that had to be met. I think the OBD system and the OBD-II system in particular, was designed to help it meet those standards that are being dictated. The automobile, generally speaking, in North America is a North American automobile, and we make a lot of automobiles here in Canada for the United States.

We've worked on the principle of harmonization. If they get good technology, we get the same good technology. We actually have to produce it here to send it down south. The fuels ought to be compatible with the technology to be able to get the best environmental performance.

I think it was driven by EPA. MMT was always sitting in the background. One wasn't quite sure how that would evolve and one is still not quite sure how it's going to evolve, despite what's going on in the United States right now. In any event, it was driven by EPA tailpipe standards. We're harmonized for all intents and purposes with the U.S. We make the same automobile and we need the compatible fuels. MMT was not in U.S. fuel, and it was very adamant that MMT should not be in Canadian fuel because of the potential effects on the OBD-II.

Mr. Steckle: Has it been determined that there is an extra cost involved in removing MMT and replacing it with another product? Can that really be ascertained? I can recall that when lead was removed the argument was made that it was more costly to go to MMT than to lead. There was a cost increase passed on to the consumer. I'm just wondering if it has really been ascertained that there is an increased cost, or is it that we don't know yet but there might be? We know what the cost at source might be, but we don't know what it might relate to the consumer yet.

Mr. Vena: We have in essence done a couple of studies. In one we relied on the Canadian Petroleum Products Institute to provide us with its estimates. In the discussions Mr. Clarke was talking about earlier, the federal government did set up a joint government-industry committee in June 1993. We were trying to address three issues, including motor vehicle emission standards in Canada, MMT's continued use in Canada, sulphur and diesel, and the question of fuel reformulation. I think that's where a number of presentations were made by Ethyl Canada, by the Canadian Petroleum Products Institute, by the motor vehicle manufacturers, and by the automobile importers. At the time, at a presentation by the petroleum institute, it was indicated to us that the cost of removing MMT would be $50 million capital with an ongoing yearly cost base of $25 million. So that's where the one-tenth of a cent per litre comes from.

.1625

We have been doing some additional work, and obviously they've refined that figure. Since that time, I think, the dollar figure has increased to somewhere around $83 million. I can't picture what that means precisely in the marketplace, but there obviously is an additional cost to the refiners in removing MMT. However, I don't know exactly how that translates.

Mr. Steckle: On the health side, if manganese oxides are airborne and can cause health problems, why does it not appear to be such an issue with Health Canada? Or is it? I find some bit of a problem here in understanding where Health Canada is coming from on this one.

Mr. Raphael: I believe Health Canada has done five different assessments of manganese oxides and MMT since approximately 1976. Over and through those assessments, we've used standard assumptions and techniques in risk assessment. We've had those assessments reviewed by outside experts. Our latest assessment was reviewed by Michael Davis, the author of the U.S. MMT study and manganese study. It was confirmed again that Health Canada had arrived at the same toxicological assessment as the United States Environmental Protection Agency. The divergence was based on actual in-use Canadian data being available for the exposure assessment versus the U.S. EPA modelling exercise based on Riverside, California. I think the position we have is strictly with respect to the oxides of manganese derived from the combustion of MMT.

This information from Health Canada has been brought forward to the federal-provincial working group on the development of air quality objectives and guidelines, reflecting an interest in controlling various airborne pollutants, including particles and particulates, of which manganese oxides are just one of the species. This federal-provincial body, created with respect to CEPA in bringing forward air quality guidelines, is working on the development of a new particulate standard, PM10 and PM2.5. I would suggest that our interest in Health Canada is not necessarily confined to particular oxides of manganese or other metals, but is particularly aimed or geared at particles and particulates, fine particulates in particular.

A recent study performed under the auspices of the CCME has shown us that the development and attainment of airborne quality standards for particles, ozone and other toxics would yield a health benefit in excess of $31 billion over the next 23 years. I think our focus is on a comprehensive solution with respect to the health impacts of airborne pollutants and it is really geared towards particulates in particular, because of their known health impacts.

With respect to our report on manganese and manganese oxides from MMT combustion, I think it is a comprehensive report. It's been peer-reviewed and has now been presented in international scientific fora. It really stands on its own as a report, but I think it reflects very well on the strategy that we have towards a comprehensive solution to air quality problems, specifically from the health point of view, by not going on an additive-by-additive or pollutant-by-pollutant approach but by looking at the overall health impacts.

.1630

If I can digress for one point, with respect to the alternatives that were discussed previously, several were covered with respect to the oxygenates, the use of ethanol, methanol, and methyl tertiary butyl ether, while keeping the cap on aromatics - in particular, benzene.

We have concerns with respect to MTBE. MTBE was on the CEPA priority substances list, an evaluation was done under a particular scenario, and that is the present use and containment situation for MTBE. Should MTBE be added to Canadian fuel as a replacement for MMT? That exposure scenario changes for us and we are in the process of evaluating it at the request of the Canadian General Standards Board, which is considering MTBE as part of gasoline formulation.

We're also concerned about MTBE because of new data that is now available but wasn't available at the time of the original CEPA evaluation. There is a long-term cancer study now available and it needs to be evaluated and brought into the assessment.

I think what we're seeing as we discuss these issues over time is that more information is coming on stream about some of these additives. We're also learning more about the overall effects and impacts of various air pollutants, whether they act in a synergistic or agonistic fashion.

I think it does call upon us when we're considering fuel composition, fuel additives and so on, to think of the overall air quality that will be generated by particular combinations of fuel and fuel additives in terms of, from our point of view, their health impacts.

The Chairman: Mr. Wappel, please followed by Mr. DeVillers.

Mr. Wappel (Scarborough West): Thank you, Mr. Chairman.

Gentlemen, madam, I'm new to this committee so perhaps I don't see things as clearly as some others, so let me get this straight. We have MMT in Canada. It is a fuel additive used to increase the octane rating, and it has been around since 1977. In order to be used in Canada, we - that is to say, Health Canada and Environment Canada - presumably had to approve it for use. If not - I see Mr. Vena shaking his head. Does that mean we didn't approve it for use? Let's start with that.

Mr. Vena: My understanding is that yes, we don't have a process - maybe Mr. Raphael can correct me - in place to screen fuel additives. There was no assessment done in 1977 to determine whether we could or couldn't use it.

Mr. Wappel: So we knew that lead was bad and we had to take it out, but we allowed something to be put in that we knew nothing about.

Mr. Raphael: If I could interject, I don't think it's fair to say we replaced lead with something we knew nothing about.

Mr. Wappel: Well, what did we know about it?

Mr. Raphael: What did we know about lead?

Mr. Wappel: What did we know about MMT? That's what we're talking about.

Mr. Raphael: We know that as a substance MMT itself is toxic - and that's in the scientific derivation and use of the term ``toxic'', not the legal. What we do know about the use and manufacture and so on of MMT tells us it is quite strictly controlled and has occupational limits for exposure.

What we know about manganese and manganese oxides are that, first of all, manganese and manganese oxides are naturally occurring. They occur in nature. What we know about MMT is that upon its combustion, it generates manganese and manganese oxides. I think that's something that should be noted.

In terms of the toxicity of manganese and manganese oxides, I think we know quite a bit, particularly from occupational studies. In this general area of toxicology, we learn very much from occupational studies. We are fairly knowledgeable, because of those occupational studies, in terms of setting what would be limits from which to compare the exposure of Canadians.

.1635

By the way, the majority of exposure Canadians have to manganese and manganese oxides occurs through routes other than the airborne route. We know humans are not very sensitive, as compared to other species, to the impacts of manganese via the routes other than air. It is the airborne route that has drawn our particular attention with respect to discussion of MMT combustion. I believe the report we have produced shows an association between manganese oxide and, not necessarily MMT combustion, but base-metal smelting and steel smelting.

Mr. Wappel: Excuse me, but I'm talking about MMT as a fuel additive in gasoline. That's all I'm talking about. I'm not interested in mining or any other subject. I'm interested in MMT as a fuel additive. It's my understanding, based on what you said earlier, that Health Canada has found no adverse health effects arising as a result of the use of MMT in gasoline in Canada. Is that not true?

Mr. Raphael: Yes, that's true, and we've done that on the basis of the combustion products of MMT.

Mr. Wappel: All right. Now, just so I can understand it, the purpose of this act is to prohibit interprovincial trade and prohibit the importation of an additive that has no adverse health effects on Canadians. I presume the only rationale for prohibiting importation is that it is said to damage on-board diagnostic systems. Since you have said you have no studies, the only possible studies upon which you have based that conclusion are studies by automobile manufacturers. Is that not also correct?

Mr. Vena: Yes.

Mr. Wappel: Which manufacturers provided you with studies?

Mr. Vena: Studies were provided to us on various impacts of MMT on cruise control equipment by Ford, Chrysler, Honda, Toyota and General Motors.

Mr. Wappel: And on what conditions did they provide those to you?

Mr. Vena: In the process of trying to obviously come to grips with this particular issue of use or non-use in the context I described -

Mr. Wappel: No, I don't mean it that way. I'm sorry. They provided you with studies they had conducted in an effort, obviously, to convince you that MMT is damaging on-board diagnostic systems. When they gave those studies to you, did they state that they were confidential and for your eyes only, or for some other reason - If so, for whose eyes?

Mr. Vena: Those were provided to us, and they were provided to us on a confidential basis.

Mr. Wappel: And what does that mean?

Mr. Vena: In essence, it means we were seeking data. As you said, it's a very narrow field. The only ones doing work in that area are either Ethyl or the auto manufacturers. From Ethyl, we also got a lot of data that we made requests for.

Mr. Wappel: I'll get to that. What I want to know is the meaning of ``confidential''. How do you interpret the phrase, ``These reports are confidential''?

Mr. Vena: In essence, I think there is a determination by the third party that provides this information to us as to what they deem it to be. Through the access to information commissioner, there's another assessment done as well. In essence, we have provided the data that we are allowed to release from those reports through an access to information request to Ethyl, who have asked for it. So we'll try to provide that data to them.

Mr. Wappel: We're not from Ethyl. We represent the people of Canada. We are being asked to pass an act and, as I understand it, we're being asked to pass an act that is based upon studies prepared by automobile manufacturers - and automobile manufacturers only - that are confidential and are not to be seen by the people of Canada. So I take it we are being asked to take a leap of faith with the scientists and with the various auto manufacturers and pass this bill, because nobody seems to want to show us the studies.

I take it, then, that if the confidentiality is with the manufacturer, if the manufacturer comes here, it's entirely up to the manufacturer to reveal those studies if they so wish. Isn't that correct?

Mr. Vena: That's right.

Mr. Wappel: And if they refuse to, then we can do what we like as a committee.

.1640

Mr. Vena: Dispositions are available in terms of providing that information.

Mrs. Fry: First of all, one has to remember that if somebody wants to challenge the determination of commercial confidentiality, obviously under the Access to Information Act there are processes that apply.

Insofar as this committee is concerned, our understanding of the parliamentary rules is that normally committees would respect things that are held to be confidential under statute. In this case the statute is the Access to Information Act. So the position officials would take on things such as this is we would request that the committee respect that -

Mr. Wappel: Well, the law and the powers of committees are evolving on a day-to-day basis. Will you please make available to this committee those portions of the studies that you have given to Ethyl Corp. and those portions that are not confidential and that Ethyl Corp. has given you. In addition, would you make available the study you prepared or you talked about on NOx emissions in answer to my friend from the Reform Party?

Mr. Vena: Yes.

Mr. Wappel: Thank you.

I'll go to a different line of questioning. This bill is introduced by the environment minister. We've talked about the apparent non-adverse effects of MMT on the health of Canadians, but they may affect on-board diagnostics which peripherally would examine various noxious things in cars and may then tangentially affect the environment. We're concerned about the environment. We're concerned about what people breathe in.

Why, then, is it that the minister in the bill is not the Minister of the Environment? Why is it that the minister is left to the decision of the Governor in Council, which, I'm sure you will agree, is not common practice in bills? In most bills the minister is described as the minister who is in fact moving the bill. In this case, when we're concerned about the environment and when the environment minister is moving it, what's the policy thinking in the department behind not making the minister the Minister of the Environment?

Mrs. Fry: I can't answer the question on policy thinking. Obviously that's for ministers to answer. I also can't tell you statistically how many acts do have a specific minister named - or to be designated by Governor in Council. But I can tell you my personal experience. Certainly an awful lot of acts are written in this way.

Mr. Wappel: Is that all you can tell me in answer to that question about why the Minister of the Environment was not named specifically?

Mrs. Fry: That's all the information I have.

Mr. Wappel: Well, the drafters must have taken their instructions from somebody. Who would they have taken their instructions from? Directly from the minister?

The Chairman: Mr. Wappel, it might be appropriate for me to draw your attention to the fact that a political decision made by cabinet cannot be explained by officials.

Mr. Wappel: I understand. I'm asking whether this was a political decision made by cabinet. All I need to know is whether somebody addressed their minds when the drafters were doing this and said, by the way, make sure the minister is not named, we'll name them later. I don't know how the process of drafting a bill works, because I don't work in the drafting department, but presumably our colleagues here in the witness area would know that. I'm asking that specific question on clause 2, about the definition of ``Minister'': when the drafters were drafting it, did they receive specific instructions, and if so, from whom?

Mr. Clarke: I'm not sure I can answer your question, Mr. Chair. Obviously the drafters must have received instructions to have left it the way it is.

Mr. Wappel: Could I ask that you undertake to inquire and get back to the committee on the reason?

Mr. Clarke: I will certainly inquire, and if I can tell the committee what they're looking for, I will certainly do that.

The Chairman: Mr. DeVillers.

Mr. DeVillers (Simcoe North): Thank you, Mr. Chairman.

In answer to one of Mr. Wappel's earlier questions about when lead was removed from gas and MMT was put in, and whether a process was involved for testing or approving, etc., I believe the answer is none exists. No process currently deals with fuel additives and their approval.

.1645

Mr. Vena: Yes, I was trying to address the question of whether fuel additives have to be registered. My understanding is that they do not. This is history and I may not have all the information here because I don't know it very well, but with respect to when lead was removed, you did assess alternatives.

Mr. DeVillers: But I believe this committee in its report on CEPA is recommending that sections 46 and 47 of CEPA be amended to include dealing with fuel additives. I wonder if I could have each department's comments on the advisability of that eventuality.

Mr. Raphael: The environment and health ministers are still preparing their responses to the report. At this point, I can't answer your question on the advisability of that. I would say -

Mr. DeVillers: Do you have no opinion on that?

Mr. Raphael: Are you asking my opinion?

Mr. DeVillers: Yes.

Mr. Raphael: I really have none at - [Inaudible - Editor] -

Mr. DeVillers: How about Environment Canada?

Mr. Clarke: I guess one of the constraints in CEPA as it currently exists is that you have to burn the fuel in order to be able to assess whether it's a pollutant or not. That poses a bit of a challenge for us from time to time. We must admit that.

For example, benzene is a known carcinogen. It's toxic according to CEPA, and benzene is a constituent of fuel. But you can't get the benzene in fuel if you want to get the benzene in fuel unless you burn the fuel and benzene is coming out of the tailpipe. Incidentally, that happens too.

So there were some constraints on CEPA that are problematical, because air pollution does not occur only when you burn things. If you stand at a pump, particularly in the good old days, you could get pretty high just breathing that stuff. And it wasn't being burned. That's simply a natural product vaporizing into the air. The stuff that vaporizes into the air is a constituent of smog in certain areas of Canada.

So that's why I think the standing committee probably made its recommendation as to why we should expand the section on fuel to include those sorts of provisions.

I hope I've been helpful, Mr. Chairman.

Mr. DeVillers: I still don't know whether the opinion is that this recommendation should be accepted or not. Do you have an opinion? Is it advisable to accept that recommendation?

Mr. Clarke: From an Environment Canada standpoint?

Mr. DeVillers: Yes.

Mr. Clarke: Yes.

Mr. DeVillers: Thank you.

I understand that MMT in the gasoline affects the new on-board diagnostic systems in the vehicles. So they won't work, they will be disconnected, and vehicles in Canada will not have the benefit of the on-board diagnostic system.

Mr. Raphael, do you think there'd be any potential health risk involved in vehicles not having the benefit of these on-board diagnostic systems?

Mr. Raphael: That would be a highly hypothetical, multi-factorial situation. We are looking at the health impacts of certain air quality scenarios. I think before I could properly answer we would have to examine - and have fairly good confidence in - the scenario that we're dealing with in respect to unburned hydrocarbons, NOx emissions, CO, aromatics and other toxics, as well as the differences that can occur in different parts of the country because of certain situations - conversions in the lower mainland, etc.

I don't think it's quite possible to ascertain the health impacts with respect to the condition you're mentioning. I think it would have to be done in more detail and actually flesh out a scenario that needs to be examined other than just the failure of particular systems.

.1650

Mr. Clarke: If OBD-II could function the way it is supposed to function - and it functioned well - presumably there would be fewer emissions into the environment; air quality would be better, particularly in the urban centres; and the consequence of improved air quality should have an impact upon health. That's how I would come at it.

The consequence of OBD-II not working properly is equivalent to a system that could run down, and if the person is not aware of it - say the light is turned off or whatever - you could have more pollutants going into the atmosphere. You could have degraded air quality and you could have an impact on health. So I would come at it that way.

Mr. Finlay (Oxford): With all due respect to my colleague, I look at it quite differently. I guess we spent a lot of time coming up with CEPA, and I see this as maybe one of those first tests of whether we are going to abide by some of the principles that this committee spent a lot of time articulating and discovering.

Mr. Raphael did not say that manganese and manganese oxide were not possibly health hazards. He said MMT is known to be toxic; he said there are occupational limits for exposure, and if I'm wrong, Doctor, please correct me. Manganese and manganese oxide are the products of combustion of MMT, and he said they are naturally occurring. I remind all of us that lead and mercury are also naturally occurring but that doesn't make them not toxic. It doesn't make us not look after how much of them we put into the environment so they can bioaccumulate in the food chain and in the ecosystem. He also said these substances may have more exposure by routes other than air, but we really don't know enough about the exposure to these oxides through air. I think I have your answers to Mr. Wappel pretty accurately.

I am interested in mining and in every manufacturing process the modern world engages in. Having spent some time in Sudbury and having just spent an hour with Keep Mining in Canada, I can tell you there are a lot of toxics produced and a lot of damage to the environment that has to be looked after by mining companies, and I'm glad to say they are doing something about it.

My rationale for not permitting MMT and for supporting this bill is much closer to Mr. Clarke's. When we don't know for sure, but we do know that MMT is toxic, and we do know that smog, air pollution and increased CO2 are toxic, then I am not prepared to take the chance. We know CO2 is toxic; it's a great way to kill oneself. Put a pipe in the back of your car and sit in it for half an hour in a closed garage and it will do it every time. We have better additives that are cleaner-burning and we have car companies that are doing something to lower emissions that are significant. That's the way I look at it.

The Chairman: Do you have any questions?

Mr. Finlay: Why isn't that an acceptable method of dealing with this? There is the rhetoric about Ethyl Corp. studies and the automobile manufacturer's studies that are one way and the other, so they prove nothing to me. I think we should err on the side of the precautionary principle, which we talked about and which we have iterated.

.1655

If I've said anything incorrect, I'd like it corrected, Mr. Chairman.

The Chairman: Mr. Finlay, we will move on to a second round, with your permission.

But the chair has a brief question here to Mr. Raphael.

Is your department conducting studies on air pollution caused by industrial activities or car emissions?

Mr. Raphael: Yes, Mr. Chairman. Health Canada has an active program of air health effects research that does have at its core health effects of air quality resulting from particular industrial and/or automobile emissions. We're part of a cooperative effort with Environment Canada, Natural Resources Canada, and Transport Canada in both CEPA and other programs.

The Chairman: Can you list for us the studies you're currently conducting?

Mr. Raphael: Yes. Off the top of my head - and I know this is not a complete list. We will be able to forward a more complete list to the committee. But we are conducting studies on ozone, as a part of the NOx/VOC science program, and looking at, in particular, the Lower Fraser Valley, the Windsor-Quebec corridor, and the Atlantic region.

Also, we have a sixteen-city study that examines a morbidity analysis, a hospitalization analysis, of the most common air pollutants. We've had about ten or twelve in that study. These are the sixteen largest centres in Canada. They're involved in this hospital admissions-morbidity-mortality analysis.

We are also conducting studies on the strategic program we're involved in with CEPA and the bringing forward of the new regulations. In particular we've cooperated with Environment Canada on the new regulation for benzene.

We're also conducting studies on the health impacts of fine particulates, fine respirable particulates in particular. We're doing that in support of a new air quality objective, in cooperation with the provinces and territories. Particulates, as I said before, are a high-priority item for us, because they have been directly implicated in mortality of Canadians.

The Chairman: Have you conducted for the health impact studies a study quantifying the costs to the public for the impact of the pollution created on hospital admissions and hospital care? In other words, have you conducted econometric studies following your impact-on-health studies?

Mr. Raphael: Yes. I think they are at a slower pace than our health impact studies. Our econometric studies - one in particular that they've done in cooperation with the CCME is otherwise known as the Hagler Bailly analysis of the CCME DMs' task force on cleaner fuels in vehicles, where we extended the health impact studies to an econometric analysis looking at health benefits from meeting particular air quality objectives.

The Chairman: It might be helpful if you were to make these studies available to the committee.

.1700

To turn to MMT, did I understand you correctly in your earlier reply to Mr. Steckle? Did you address emissions of manganese oxide in your study of November 1994?

Mr. Raphael: Yes, that was the prime area the study was designed to look at.

The Chairman: Did you also address emissions of MMT itself?

Mr. Raphael: The study touched on that but did not examine evaporative emissions of MMT. I believe that's what you were talking about.

The Chairman: Did you say evaporative?

Mr. Raphael: Is that what you were referring to?

The Chairman: I meant MMT per se. I wouldn't know how to qualify it.

Mr. Raphael: Okay.

The Chairman: Did you address it?

Mr. Raphael: The study did address the question of exposure of Canadians to MMT based on the physical properties of MMT and the likelihood from the information that we had available that Canadians were not likely to be exposed to MMT directly.

The Chairman: Are you satisfied that you addressed MMT emissions in a conclusive manner?

Mr. Raphael: Yes, Mr. Chairman. I believe we are satisfied.

The Chairman: Thank you.

For the second round we have Mr. Pomerleau, followed by Madam Kraft Sloan, followed by Mr. Chatters.

Monsieur Pomerleau.

[Translation]

Mr. Pomerleau: I just have one small question. The automobile manufacturers claim that they have conducted studies showing that MMT damages the anti-pollution system. Did they do the same type of studies on ethanol or any other MMT substitute?

[English]

Mr. Vena: Did you ask if other additives or elements in fuels would have the same concerns with respect to impacts on on-board diagnostics?

[Translation]

Was that your question?

Mr. Pomerleau: I wanted to know whether the automobile manufacturers, who say that they have conducted studies showing that MMT damages the anti-pollution system, had done similar studies on MMT substitutes.

[English]

Mr. Vena: To replace MMT, the types of replacement compounds are ethanol or MTBE or something that has to be done at the refining end. Most of those constituents are not different in Canadian and U.S. fuels. Some of their work in designing the on-board diagnostic systems obviously took into account the fuel regime we're dealing with. The principal element of difference is actually MMT and, to some extent, sulphur.

I think they did have a matrix of fuels available and they did have some experience with respect to emission impacts as well as potential concerns on on-board diagnostics.

I don't think they did explicit studies per se, but the fuel constituents they were concerned about with respect to replacements are available. Fuel in the U.S. doesn't have MMT, but they have quite a bit of MTBE or ethanol available. Those are changes and they have not experienced any concerns with respect to those fuels.

[Translation]

Mr. Pomerleau: That's all, Mr. Chairman.

The Chairman: Thank you, Mr. Pomerleau. Mrs. Kraft Sloan.

[English]

Mrs. Kraft Sloan: Thank you very much.

Could tell us what the products of photolysis of MMT are after MMT is photolysed in the environment? What kinds of by-products occur?

Mr. Raphael: There are a number of oxides formed, including in particular oxides of manganese, as well as the potential liberation of manganese itself. In particular, I think, the liberation of manganese and the oxidation products of manganese - MNO3 and other oxides of manganese - are primarily what people are looking at with respect to the environmental impacts.

Mrs. Kraft Sloan: And what are the effects of some of these products on the environment and human health? Do we know?

.1705

Mr. Raphael: The health studies we have available show that manganese is neuro-toxic at high levels. It is capable of crossing the blood-brain barrier. In occupational studies from Europe we have had access to reviewing, at very, very high levels the neuro-toxicity of manganese, and in particular the oxides, is evidenced in neuro-behavioural impacts.

Mrs. Kraft Sloan: You'll have to forgive me, because I'm not a scientist. Maybe you can help clarify some of these things for me. Does this easily bioaccumulate in human tissue or animal tissue? Once it comes into living tissue, does it stay there?

Mr. Raphael: Its resident time in animal tissue is not that different from that of other compounds in the similar class of heavy metals.

One thing we should remember -

The Chairman: Can you elaborate?

Mr. Raphael: I can't give you the exact resident time, Mr. Chairman. It's very important to remember that manganese is an essential element. We need it as a co-factor in many important enzyme systems in our body. Therefore our body has the ability to capture manganese from environmental sources up to a point, beyond which, from the evidence we have of occupational situations, it can accumulate. But about the impacts and time sequences we're looking at in humans I think very little is known, because we just do not have people who have been exposed to such high levels of manganese on a regular basis.

Mrs. Kraft Sloan: Is it high levels at one time or lower levels over a period? Do we have information on that?

Mr. Raphael: From the information we have, which is from occupational studies, it is high levels of exposure repeatedly. The Roels study, which was the Dutch epi-study, was in an occupational situation where people were working 40 hours a week in what I think was a battery plant.

There are other studies involving simulation exposures of monkeys. In order to get accumulation in tissues, we have to have levels exceeding even the Roels study in the Netherlands. We're talking about a concentration 1,000 to 10,000 times higher than the reference concentration, which is itself 10 to 100 times higher than levels found in the air in Canada.

Mrs. Kraft Sloan: Have any mass balance studies been conducted on the by-products of MMT or on MMT itself? Then, what other media would these by-products enter into? The atmospheric media may not be as big a problem, but does it go into soil, does it go into water? If it is in soil and water and those other media and there is some concentration in human tissue, how does this all interact? Do we have an understanding of that?

Mr. Raphael: You've hit on a very difficult area, the mass balance studies when you're talking about naturally occurring elements. In particular, the oxides of manganese that are formed on combustion are naturally occurring themselves. They are formed though processes other than anthropogenic processes.

Yes, the very preliminary studies that have been done indicate it is very difficult to discern oxides of manganese that are being formed naturally from those that are being formed in combustion sources. We do know the majority of one's exposure to these items, the manganese oxides and manganese itself, is through food. But we also know there's a differential absorption. Manganese oxides are just not taken up through the gut in any way, shape, or form similar to the lead situation. So a very, very different situation is happening with manganese oxides in food versus lead in food.

.1710

Mrs. Kraft Sloan: Again you'll have to help me. In urban settings, especially when there are atmospheric warnings - I'm an asthmatic sufferer, for example, and one day in the summertime I walked from my office to my car and had an asthma attack and couldn't breathe because of the atmospheric conditions, the humidity, etc. That is a quite startling thing to have happen to an individual.

When you start to look at built-up urban areas, other atmospheric problems are going on, especially with very humid situations, climatic effects, as well as all the other kinds of things that are going on in the atmosphere. You used the word ``synergistic''. The products may go into other media. Do we understand how those kinds of things may interact over a longer period?

Mr. Raphael: The science on that is evolving. We're learning more and more from those situations. We're getting better at being able to trace anthropogenic sources of some of these constituents. In terms of our knowledge of impacts of air quality in built urban environments versus, I guess, other environments, either rural ones or those considered to be more pristine, we caution people about believing that air quality necessarily is a problem only for highly urbanized or built environments.

Mrs. Kraft Sloan: Exactly. There are problems in rural settings. Actually, this was in a smaller community, Newmarket.

To go back to my earlier question on the mass balance studies, we don't have anything that definitely says that the by-products aren't being taken up by other media. Therefore, we cannot say conclusively that there's no health effect.

Mr. Raphael: I think we know that if the oxides are trapped in soil, the by-products will be available for being caught up in the food chain. That's a fair estimate. With respect to manganese oxides that are occurring in food - and we do have that type of information from a multimedia analysis - that far exceeds the exposure that might occur to manganese itself in air.

We also know that differential absorption and differential toxicity through the airborne route make it more important from a health point of view than the manganese we ingest just on a daily basis in our food or as a part of the soil or water that we ingest on a daily basis.

Mr. Chatters: I've been confused by some of the line of questioning that's gone on in the last round, so I'd like to reaffirm some things.

You told us that you have accepted and find the evidence to be conclusive that MMT in gasoline is not a health hazard in Canada. Am I correct?

Mr. Raphael: Yes.

Mr. Chatters: That's good.

The other remark I heard from one of my colleagues is that it was a given that we brought this bill forward because MMT was adversely affecting the on-board diagnostic systems in new cars. Again, I heard you tell me that you do not have conclusive evidence to show that the on-board computer systems are failing any more in Canada than they are in the United States, where MMT is not used. Is that also correct?

Mr. Vena: Yes. I did make the statement that it's difficult to quantify that at this time because we just don't have these systems in operation. They are really starting to appear in Canada only in 1996 model year vehicles, so it's difficult to make that kind of quantification.

Mr. Chatters: That's good. Thank you.

Let's go back to some of the other areas we've been covering, on the issue of products that might be used as a replacement for MMT, which of the ones you've mentioned, including the further refining of crude oil to make gasoline, which raises the emissions of aromatics, benzine included. You can correct me if I'm wrong, but one of the options that was available was this more intensive refining process to raise the octane level. The others were a couple of additives. Which one would have the lowest cost and therefore be the most likely process to be used if MMT is banned?

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Mr. Vena: As I indicated, I think that's highly dependent on the various configurations of refineries - what a refiner can or can't do. There are two ways of doing it, either through process modification or through the addition of octane enhancers. So it's really highly dependent on the refiner as to which way is most cost-effective.

Mr. Chatters: Are any of those other processes or products capable of lowering the nitrous oxide emissions, as MMT does? Nitrous oxide emissions contribute to urban smog that causes problems for asthmatics.

Mr. Vena: Obviously you have the push to certain oxygenates in a number of areas. As an example, some areas of the U.S. require certain oxygen content in fuels. Oxygenates are very good octane-enhancing constituents. Where you have concerns with respect to high carbon monoxide levels, they will reformulate their gasoline by adding oxygenate ethanol, as an example, or MTBE.

Nothing is ever a panacea. You never have one product that is the best product in the world. It would be nice to be able to get to that point, and that's what we're trying to do, but oxygenates will generally reduce CO emissions, more so in later-model vehicles than in current models because they're trying to control the air-fuel ratio as closely as they can to avoid excessive pollution. But in some of the older models it is a very efficient way of reducing CO emissions. Obviously, if you're going to add a constituent like ethanol, MTBE or others to a certain percentage, you're removing some constituents from gasoline. If you're going to add about 10% or 7.5% of one constituent, you're going to remove certain things, and that will include removing some of the toxic constituents that are part of the mixture. You have to be very careful, though, because some oxygenates produce other constituents such as aldehydes, so you have a trading scheme to do there as well.

There are some pluses and some minuses, and on some of those you really have to do a full analysis to see which way to go. Obviously some analyses have been done on some of these things, and they're on the positive side of the ledger, which is what -

Mr. Chatters: So the alternatives will not lower nitrous oxide emissions.

Mr. Vena: My understanding is with ethanol and MTBE, and some other alkylates, no, they will not. But they could lower others.

Mr. Chatters: Someone remarked that one of the other reasons to consider this bill was fuel harmonization with the U.S. It is my understanding that for some 18 years MMT has been under close study by the Environmental Protection Agency. It has done a lot of work and has finally granted a licence again to use MMT in the United States. That granting has been challenged in the court. It has won one process; it's in the federal appeal court, due shortly to be ruled upon. Analysts tell me there is a 70% to 75% chance it will be approved.

By banning it here, and with a good possibility of it being approved in the United States, are we not moving away again from the possibility of fuel harmonization?

Mrs. Fry: Maybe I can talk a little bit about the legal process, if you wish. As you mentioned, a long history of legal process has been attached to this issue. I, for one, never try to predict the outcome of a court decision because -

Mr. Chatters: Well, there are those who have.

Mrs. Fry: Obviously, at this moment there is no court decision either way on that matter. By no means should we assume that when that court decision comes out, whichever direction it goes, it will be the end of the matter.

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The fact of the matter is we don't know exactly what would happen even, say, in the event of a negative decision against EPA, because, for example, should there be a negative decision against EPA, EPA might decide to appeal. That could take a year or two to resolve, if it happened. If they got a negative decision they -

Mr. Chatters: Where would they appeal to? It's now before the federal appeal court, is it not?

Mrs. Fry: There's another higher court. My colleague tells me it's the superior court.

EPA might decide they have other legal tools they want to try. Should there be those - and so on. It could take a long time.

Mr. Chatters: But in the interest of fuel harmonization, would it not make sense to wait at least until this court ruling comes down to see whether banning it will bring us into harmonization or take us away from harmonization?

Mr. Clarke: MMT is not in use in the United States of America. We are harmonizing towards that standard, if you want to put it that way. We're not prepared to speculate on what may or may not happen down there.

But perhaps I might speculate to this extent. If the automobile manufacturers are so convinced MMT poses a problem for them, I would expect that would apply more so in the United States if MMT were to be brought back into gasoline. I would expect something to happen there.

That having been said, we are prepared to let this thing unfold. We're not prepared to make any assumptions at this stage of the game.

Mr. Chatters: You're not prepared to repeal the law if MMT is again allowed to be used in the United States, in the interests of harmonization?

Mr. Clarke: There is something in the act, isn't there?

Mrs. Fry: There's technical capacity, if one wanted to make a change quickly. But I believe what Mr. Clarke is saying is that we would cross that bridge if and when we came to it.

The Chairman: The intriguing question is still whether the automotive industry, having not had access to the use of MMT for sixteen or seventeen years, would be willing to turn the clock back technologically should MMT be allowed to enter the market. Technological advance has taken place over these years and it will also have a certain impact on the auto industry. The auto industry is not likely - When they come here we will ask them whether they are likely to turn the clock back sixteen years.

Mr. Chatters: It is my understanding that upon a favourable court ruling, a number of manufacturers in the United States are waiting to use MMT in gasoline again.

Mr. Vena: That's an issue - if technically a decision were favourable to Ethyl and the 45-day appeal period passes and MMT again can legally be in U.S. commerce, there is the question of uptake that surrounds a lot of the uncertainty. There are areas in the U.S., and obviously Ethyl can speak to this too - But the waiver really only applies to the conventional gasoline pool. There is now a substantial portion, 30% or 35% - it depends on when you look at it, because some states opt in and out - of reformulated fuels, where obviously MMT is not part of this waiver application.

What the automotive manufacturers will do in discussions with us about some of their concerns is also important. Obviously technically it can get back into the fuel, and some refiners obviously may, from a cost-effective or marginal octane point of view. But there's still quite a bit of uncertainty surrounding that uptake. To suggest MMT will now be fully available, they will use it in the U.S - There's still quite a bit of time to play out. This has been playing out for years and years.

I just put that caution out there.

Mr. Wappel: I really wanted to go on to another area, but just for a point of information, the information I have is that the United States court of appeal for the District of Columbia made the decision in connection with the case Mr. Chatters was talking about. It was decided on April 14, 1995. I don't know very much about United States law, but I presume that the appeal is then from the court of appeal to the Supreme Court as opposed to the superior court.

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Mrs. Fry: Yes. I guess that one of the confusions in this instance is that several court cases are in issue. I believe the decision you are talking about is the one on the waiver application.

Mr. Wappel: On the waiver. That's correct.

Mrs. Fry: Right now we're talking about the decision on the registration application, which is a different case.

Mr. Wappel: It's interesting, because the court of appeal found that for the purposes of that application the Environmental Protection Agency had determined that Ethyl Corp. had demonstrated that the use of MMT did not cause or contribute to the failure of any emission control device or system as set out for EPA purposes in the United States. I simply put that on the record, because I found that interesting.

I would like to ask about the bill itself. My understanding is that it would permit the minister to authorize the use of MMT in certain circumstances, subject to monitoring requirements. I wonder if you could tell me what those monitoring requirements are.

Mrs. Fry: That is where somebody who wants to use MMT for a purpose other than unleaded gasoline gets permission.

Mr. Wappel: What would those purposes be? Could you give me an example?

Mrs. Fry: Frank, can you think of an industry example that might be a likely one?

Mr. Vena: It's unclear. MMT was used and can be used in smoke suppressants in diesels. There could be other uses for MMT.

Mr. Wappel: Let me put it in this way: do you know of any uses for MMT in Canada today other than as an additive for fuels, unleaded gasoline?

Mr. Vena: We're not aware of any.

Mr. Wappel: Then this provision has been drafted with something in mind that isn't currently occurring in Canada.

Mrs. Fry: Yes, indeed. Obviously, once something is entrenched in legislation, it is very difficult to change. We didn't want to be in a position where we had banned all importation of MMT when we were intending merely to hit the situation of unleaded gasoline and then, x years from now, somebody comes up with a very legitimate use for it, having nothing to do with unleaded gasoline, and we say, ``Oh, my gosh. We're sorry. Although we think it's a good thing, the statute won't let us let you take it in''. That's the purpose of that.

Mr. Wappel: In clause 4, then, why would you not have worded it ``No person shall engage in interprovincial trade in or import for the use in unleaded gasoline of a controlled substance''?

Mrs. Fry: If you work the thing through, the effect is the same. It's just the way it came out in the drafting.

Mr. Wappel: It seems to be extremely broad under clause 4 if your only purpose is to capture MMT in unleaded fuel. The way clause 4 is worded it's any commercial purpose of any kind unless the minister exempts it. If the reality is that we wish to ban it only in unleaded gasolines, then that's what we should state.

Mrs. Fry: We also have to think about the ease of enforcement of this statute. For enforcement purposes, to have a successful prosecution if somebody violates the law, the prosecutors like to have a nice clear statement such as clause 4.

If the person brought it in, they're forbidden unless they have the authorization under section 5, which again is a nice, clear, definable thing. So we reduce the risk that somebody might wriggle through a technical or wording crack.

Mr. Wappel: Right. So prosecutors like it broad.

Mrs. Fry: Prosecutors like it clear and simple, just as you do.

Mr. Wappel: And broad, as opposed to very narrow so that you can get around it.

Could you tell the committee what the monitoring requirement is should the minister give permission for use?

Mrs. Fry: Obviously the intent of the monitoring requirement is to make sure they're using MMT in the way that was contemplated by their authorization - that, God forbid, they didn't lie in their application and then use it for unleaded gasoline.

They have to keep various records and send in various reports and so on.

Mr. Wappel: Could you tell me about that?

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Mrs. Fry: Clause 9 describes the fact that anybody who has an authorization under clause 5 has to maintain a record. Subclause 9(2) describes the information that should be in the record. I'm sure you can read that if you have a copy right in front of you.

Mr. Wappel: My point is that they must make the record within 30 days of the transaction. Isn't that right?

Mrs. Fry: Yes.

Mr. Wappel: And whoever the minister may be is going to be very concerned about these monitoring requirements. So tell us what's going to happen with this report that has been made within 30 days of the transaction. When does it have to be given to the minister?

Mrs. Fry: If you look at clause 10, you will see that the person has to maintain such a record, and has to, within 60 days after the end of every calendar year, file a report with the minister in the prescribed form and so on and so forth.

I should also add, if, for example -

Mr. Wappel: Excuse me. You said ``within 60 days''. That's not within 60 days of making out the report. In other words, you've got to make out the report within 30 days.

Mrs. Fry: Yes.

Mr. Wappel: But it's not within 60 days of making out the report that you give it to the minister. It's within 60 days of your year end.

Mrs. Fry: That's right.

Mr. Wappel: That could be 15 months later, couldn't it?

Mrs. Fry: Yes.

Mr. Wappel: So how does that monitor the use of a product other than unleaded gasolines if they've got 15 months to report it?

Mrs. Fry: That's not the only means the minister has to get information.

As I'm sure you know from looking through the act, the minister has powers to inspect at any time to make sure the act is being lived up to. Indeed, whether or not it was within the minister's normal inspection program, if somebody thought company X was violating their obligations under the act at any moment, he could contact the department and the department would send out an inspector to check on it.

Mr. Wappel: My question is perhaps very simple. Why not have the user report within 60 days of completing the report?

Mrs. Fry: Frank, do you want to comment on that one about the administration of the act?

Mr. Vena: I think it's actually a very good question. I think it makes sense.

With respect to how the act - The minister obviously sought counsel from the Department of Justice. What you're asking makes sense to me. I can't really comment on the structure this way.

Mr. Wappel: Mr. Chair, maybe we should have the Department of Justice here to answer that.

Oh, there is the Department of Justice.

Mrs. Fry: Let's not overemphasize this. The fact of the matter is there are various reporting regimes in various statutes and administrative choices are made as to exactly what the details of the reporting regime are.

This statute talks about an annual report within 60 days after the end of the calendar year. Sure, it would be possible to send in a report within 60 days or 90 days or 30 days or 5 days or whatever you want.

Mr. Wappel: That's a question of drawing lines.

Mrs. Fry: Yes.

Mr. Wappel: Presumably, this committee could draw a line other than what the drafters have drawn.

Mrs. Fry: Anything is possible.

Mr. Wappel: Thank you, Mr. Chair.

The Chairman: I sense a possible amendment emerging here.

There are no more questioners. We've had a very interesting afternoon. We learned more about gasoline than we ever dreamt and perhaps we also learned how to read bills from a legal point of view, by looking at various sections at the same time.

We want to say that what you told us by way of clarification and by way of adding information was very helpful. As you know, it is the first step in our hearings. We look forward to perhaps consulting with you on an individual basis if necessary in the coming days and weeks.

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On behalf of my colleagues again, merci, thank you very much.

The meeting is adjourned.