PFAS reporting requirement in Canada: What businesses need to know

On July 27, 2024, Environment and Climate Change Canada ("ECCC") published a notice pursuant to subsection 71(1)(b) of the Canada Environmental Protection Act, 1999 ("CEPA") (the "Notice"), requiring companies to report on their manufacture, import, and use of per- and polyfluoroalkyl substances ("PFAS"). Companies must submit their report no later than January 29, 2025.

The ECCC is collecting this information to establish a baseline of commercial use data and support future activities related to 312 PFAS listed in Schedule 1 of the Notice. This reporting requirement is part of a broader government mandate to assess and manage potential risks to human health and environment, and, if appropriate, implement preventative or control measures before PFAS are imported into or manufactured in Canada.

PFAS are synthetic organic compounds that do not naturally occur in the environment. Due to their strong fluorine-carbon bond, these "forever chemicals" do not degrade and are thus highly persistent in the environment. Some PFAS have been widely used for decades in consumer products, such as food packaging, electronics, and non-stick coatings, and industrial applications such as fire fighting foams, drilling fluids, automotive and aerospace lubricants, coatings, and additives, and chemical surfactants, emulsifiers, and processing aids. PFAS are known to bioaccumulate, increasing risk to the environment and to human health.

Although the Notice does not define PFAS, it does contain a list of 312 PFAS in Schedule 1 categorized as either: (i) specific perfluoroalkyl substances; (ii) additional perfluoroalkyl and polyfluoroalkyl substances; and (iii) specific use-case substances with defined applications.

Any company who, during the 2023 calendar year, participated in any of the following activities:

• Manufactured more than 1,000 g of any substance listed in Schedule 1
• Imported more than 10 g of a substance listed in Part 1 of Schedule 1, or more than 100 kg of Substances in Parts 2 or 3
• Imported more than 100 kgs of any substance listed in Schedule 1 at a concentration of one ppm or more in a manufactured item
• Used more than 10 g of any substance listed in Schedule 1

The following substances are exempt from the reporting requirement in the Notice:

• Substances in transit through Canada
• Personal use substances
• Substances in laboratories for analysis, scientific research, or as standards
• Substances in hazardous waste or recyclable material and complies with Cross-border Movement of Hazardous Waste and Hazardous Recyclable Material Regulations
• Substances registered under the Pest Control Products Act, Fertilizers Act, Feeds Act, or Seeds Act.

Companies with fewer than five employees or less than $30,000 in annual gross revenue are also exempt from the reporting requirements.

Depending on which of the above reporting criteria are met (including the type of manufactured item, and whether certain threshold levels of PFAS are exceeded), a company may need to report on some or all of the following:

• Descriptions and common names of each manufactured item containing the substance
  Known releases of substances to air, water, or land from its facilities
• Descriptions of policies or procedures to manage, mitigate, or minimize releases from its facilities
• Total quantities of manufactured, imported, used, or exported substances in the 2023 calendar year
• Application codes and substance function codes for each substance, including descriptions and common names of goods and whether the goods are for commercial or consumer use (and if for children under 14)
• Technical data, including molecular weight distribution and structural formulas, conditions for degradation and decomposition, and CAS RN and names for each monomer in the polymer.

Companies are required to provide information that is in their possession or to which they may be reasonably be expected to have access, including information that may be in the possession of employees or other agents of the company. Companies are encouraged to make inquiries and obtain information from their suppliers (including foreign suppliers), customers, and sector associations to respond to the Notice.

Any response that a company submits to this notice may be accompanied with a written request that the information, or part of it, be treated as confidential. Claims must indicate which specific information or data should be treated as confidential and the company's rationale regarding the nature of the confidentiality.

According to ECCC, claims for confidentiality may be made when the information is truly confidential, such as when the information contains trade secrets, or its disclosure could negatively impact the company's competitive position.

Entities that do not meet the specific reporting requirements but are interested in reporting, may submit a Declaration of Stakeholder Interest. This may include information on other related substances that are not listed in Schedule 1 of the Notice, activity for another calendar year, activity with a reportable substance under the thresholds, or other non-reportable activity.

In addition, the ECCC encourages companies that do not meet the reporting requirements and have no interest in any of the substances, to submit a Declaration of Non-Engagement.

Companies that require more time to comply with the Notice may request an extension from the Minister of Environment prior to the deadline by sending an email to substances@ec.gc.ca. The ECCC recommends that a request for an extension be submitted at least five days prior to the deadline and include a new proposed date for submission. Any requests after the deadline will not be granted.

Companies must comply with the reporting requirement in the Notice. Companies that fail to report contravene CEPA and are liable to fines of up to $500,000 and $1,000,000 for subsequent offences. Directors or officers who were aware of the obligation to report and failed to ensure compliance or actively participated in the decision not to report may be personally liable, whether the company is prosecuted or convicted of the offence or not.

Companies must format their reports using the Excel Reporting File provided on the Government of Canada's Responding to the PFAS notice web page and then submit the reporting file through the ECCC Single Window online reporting system.

Since the deadline is fast approaching, companies involved in importing, manufacturing, or using products in Canada must assess whether their products contain PFAS and begin to prepare their reports in short order, considering any board approval and communications with shareholders, as applicable.

This reporting requirement is one of several expected regulatory developments on this matter, as public consultation on PFAS continues and the potential for new regulations are announced. On July 13, 2024, ECCC published Updated Draft State of Per- and Polyfluoroalkyl Substances (PFAS) Report and the Revised Risk Management Scope for Per- and Polyfluoroalkyl Substances (PFAS) for a public comment period, until September 11, 2024. The updated reports recommend that the class of PFAS (as defined therein) be added the toxic substances list contained in CEPA, Schedule 1, Part 2, excluding fluoropolymers which are planned to be assessed separately.

Given the potential risks that products with PFAS create to human health and the environment, companies may also be exposed to litigation risk. As such, it's crucial that companies update their internal processes and ensure that their products and processes undergo regular review in according with this evolving regulatory landscape.

^{Please note this publication presents an overview of the recently announced regulatory reporting requirements for PFAS under CEPA. It is for informational purposes only and is not a replacement for legal advice. If you need guidance, please contact our ESG Legal Risk and Disclosure Team to explore how we can help you navigate your legal needs.}