Environment Canada Announces New Regulation
Government Announces New Regulation April 26, 2008

 

Publication of the proposed Volatile Organic Compound (VOC) Concentration Limits for Automotive Refinishing Products Regulations


Dear Madam / Sir,

The proposed Volatile Organic Compound (VOC) Concentration Limits for  Automotive Refinishing Products Regulations were published in the Canada Gazette , Part I, on April 26, 2008.  A copy of the proposed Regulations  is attach ed herein .

Stakeholders are invited to forward their comments on the proposed Regulations during a 60-day public consultation period which ends June 25, 2008 . All received comments will then be reviewed and considered by Environment Canada during the finalization of the Regulations. The final Regulations will be published thereafter in the Canada Gazette , Part II.

Background information on the proposed Regulations is available on Environment Canada's VOCs in Consumer and Commercial Products website at the following address: www.ec.gc.ca/nopp/voc/

If you have any questions regarding the proposed Regulations , please contact  Guy Gagné at guy.gagne@ ec.gc.ca or 819-994-5787.

Y ours sincerely ,

Joan Pollock
Di rector, Products Division 
Environment Canada
351 St. Joseph Boulevard, 12th Floor
Gatineau, Quebec
K1A  0 H3



GOVERNMENT SAYS NO STUDY DONE ON IMPACT OF REGULATIONS ON REPAIR SHOP PROFITABILITY

Government says as high as $772 million industry cost will close some shops.

April 26, 2008

Environment Canada today released their long-awaited low-VOC regulations for auto refinish paints in Canada, taking pains to not mention waterborne paints once.

Although shops are not regulated in this federal announcement, the new content rules for product, that takes effect at the beginning of 2010, means that the major coatings firms that possess more than 85% of the Canadian market will not be allowed to manufacture, offer for sale, sell, or import auto refinish coatings that do not conform with VOC content regulations announced. Exceptions apply, in aerosol spray containers, small volume applications (touch-up), OEM manufacture, lab use and export as well as a possible discussion on “exempt” solvents.

For auto refinish shops, who are regulated provincially, this means that obtaining some of the current product they use now will not be possible after the start of 2010, and current inventories need to be depleted. Although Environment Canada, in its enforcement budget, has only allocated less than a loonie per shop to deal with violators, it is expected that shops will need to at least change over to a low-VOC basecoat to be able to ensure continuing product supply. In most cases, for light vehicle painting, this is offered as a “waterborne” paint replacement, however Environment Canada says that most product in Canada now will not meet new standards.

Environment Canada admits that with 72% of the shops in Canada being in the “small category”, that there will be impacts on their profitability and staying in business, although they admit they never studied shop profitability due to a lack of data. It is expected that shops will need to spend $141 million in new equipment costs, $125 million for new paints and $55 million in training to meet the new regulations, although a government “worst case scenario” identifies costs as high as $772 million in total. Paint costs are expected to rise 5 % per year for four years (largely due to transport and storage costs) and less after that. Government again admits that there is significant uncertainly that these figures are accurate.

Some shops will close, forecasts Environment Canada but they expect technicians to be hired by other repair shops. They admit that cost-cutting by insurers means shops are not in a position to increase the repair price, while the decline in the number of repair jobs results in lower revenues and profit margins for all repair shops. The government also expects that consumer paid repair price increases will be unlikely.

It is expected that shop costs will be between 1% and 2.5 percent of gross revenues, each year for the next 25 years. Taken in dollars, it means that the average shop must now budget an extra average $6000 per year, every year for the next 25 years for these new expected costs, assuming paint cost increases are as forecast.

Environment Canada did not announce any efforts to address underground economy or illicit product use operations, which was a major concern of the industry shop trade associations. No special credit or tax incentives for shops were offered although the government has identified the ongoing Canada Small Business Financing Program (CSBFP) for possible financing applications from shops.

Voluntary actions, rather than regulatory means, were promoted by the auto refinish shop industry to address lowering VOCs in Canada, with positive voluntary effort by industry accounting for a nine kiloton reduction to date in VOC emissions. The government diminished those actions, calling them insufficient, and that new regulatory methods announced will reduce emission from shops by a further 2 kilotons a year (or a further 40% of current emission level). These reductions anticipated through regulation would mean that auto refinish industry contribution to VOC reduction in total Canadian emissions will be one tenth of one percent of all VOC emissions.

“Our association has worked for cleaner air and lower emissions for many years and welcomes further emission reductions for the industry, and we also recognize that the costs of this regulation may be tough for some shops but the regulations will change the industry face forever, towards a better operating, more compliant, environmentally friendly new image.” said HARA and www.ciia.com President and shop owner, Tony Nigro.

For more information, please call the association at 1 866 309 4272 or see www.autobodyhelp.ca


COLLISION REPAIR INDUSTRY ASSOCIATION
URGES CHANGES IN ENVIRONMENT
CANADA PROPOSALS

Federal government is recommending significant changes in auto refinish coatings

December 15, 2006

The Hamilton District Autobody Repair Association (HARA) has been involved with stakeholder discussions with coatings firms, regulators and others relating to the proposal to reduce the VOC content in auto refinishing coatings product.  The association has held a number of open opportunities for discussion with the industry including a presentation on September 30 at the National Trades Centre (Direct Energy Centre), Exhibition Place and a recent workshop in London on November 29.  Over 125 industry attendees learned at the London workshop what impact these proposals may generate at their shops and how best to operate an environmentally friendly repair shop.  Further industry workshops are planned in Halton region in February and Toronto in March 2007. 

Anthony Nigro, President of the non-profit trade association said, " Our association is very active in environmental issues in auto refinish and we continue to try and assist member shops to meet or exceed environmental compliance requirements. To date, we have helped over 500 shops with their environmental permitting requirements using our simplified and much cheaper streamlined application format."

HARA has submitted a stakeholder brief to Environment Canada relating to proposed VOC emission reduction regulations in auto refinish coatings product.  They have identified 10 major recommendations. 

They are:

1) That a 2-kiloton VOC emission reduction can be achieved through voluntary measures

2) That should regulation be deemed appropriate, a stop manufacture date of January 1, 2009 and a stop sale date of Dec 31, 2010

3) Grants or incentives be made available to shops to offset changeover costs

4) A human resources package to assist in job placement and retraining be initiated for shop personnel that are made unemployed

5) Insurance companies only pay auto refinish claims to facilities that are environmentally compliant

6) An environmental fund be established with money generated by coatings firms to provide changeover funding for special clients

7) Mobile operators/applicators not be exempted from the regulations

8) Aerosol containers not be exempted from the regulations

9) Environment Canada set aside funds for enforcement particularly falsified use issues and smugglers

10) A co-operative effort with provincial governments to provide "template" permitting and ease of use and costs in new permitting.

For further information on the submission please call
1-866-309-4272 or info@ciia.com

For information on Environment Canada's plans, copies of presentations and draft documents, please see http://www.ec.gc.ca/nopp/voc/en/secAR.cfm