In 2022, the broader implications of the designation of “plastic manufactured items” as a toxic substance under the Canada Environmental Protection Act (CEPA) began to emerge. In 2021, the first tranche of regulations effectively banned six categories of single use plastics (SUPs) from the Canadian market. While this first set of regulations is quite severe, it has a relatively narrow reach across the consumer product industry. By contrast, in furtherance of its commitment to zero plastic waste, the federal government released a series of updates and consultation papers which demonstrate how plastic will be regulated across all product categories. The next wave of plastic regulation promises to be farther reaching than the first with an impact that will be felt by the whole consumer product industry.

In particular, the federal government is currently consulting on the following areas of plastic regulation which are expected to have a broad impact given that virtually all consumer products are either made from plastic and/or are packaged in some form of plastic packaging:

1. Rules regarding recyclability claims;
2. Federal reporting requirements for producers, including online marketplaces; and
3. Recycled content requirements.

We expect draft regulations to be published regarding recyclability claims and federal reporting requirements to be released in the short term in late 2023 or early 2024. Further development of recycling infrastructure and capabilities in Canada, coupled with data gathered from enforcement of recyclability claims and federal reporting requirements, will inform recycled content requirements in the future.

Recyclability claims: Regulation of plastic packaging from a marketing perspective

It has been widely accepted that environmental claims can materially influence purchasing decisions, consequently, if such claims are false and misleading, the product behind the claim may enjoy an unfair share of the market. Last year saw a marked increase in enforcement of false and misleading environmental claims, otherwise known as “greenwashing,” particularly in relation to recyclability claims.

Keurig’s Consent Agreement with the Competition Bureau regarding Keurig’s claims as to the recyclability of its single-use coffee pods highlighted the challenges of making recyclability claims in light of available recycling infrastructure differing among municipalities. The Consent Agreement was released on the heels of the Competition Bureau archiving existing guidance on making environmental claims, making the agreement the most current guidance on the factors to consider when making recyclability claims in relation to packaging materials, which include among others, the availability of collection, capability of diversion and requisite level of substantiation.

Understanding the business impact of recyclability claims, the federal government has turned its attention to increased regulation of such claims with a dual purpose of promoting accuracy and influencing industry to use plastic packaging that is actually capable of being collected and diverted from becoming waste. The Consultation paper: Towards Canada-wide rules to strengthen recycling and composting of plastics through accurate labelling proposes that in order to label packaging as “recyclable,” the packaging material would be required to be accepted by 80% of recycling facilities with an established reliable end market. Moreover, industry members would need to implement robust compliance mechanisms which validate recyclability claims. If promulgated, the industry would be required to have a greater understanding of the recyclability of plastic packaging materials, particularly if seeking to make such claims in marketing materials.

Federal reporting requirements: Further accountability for plastic and plastic packaging

Concurrently, the federal government is also proposing regulations establishing a federal plastics register to formally record who is producing plastic, how much is being produced and what kind of plastic is being produced in the Canadian Market. The Consultation paper: a proposed federal plastics registry for producers of plastic products sets out the immediate objective of the registry to support adoption of extended producer responsibility (EPR) rules in Canada that are consistent, comprehensive and transparent.

Currently, EPR requirements are implemented through provincial legislation, meaning that the requirements vary between provinces and there are inconsistent tracking and reporting processes. These data gaps consequently make it difficult to implement new and/or updated requirements in relation to problematic categories of plastics.

The existing data gaps also contribute to what is known as the “free rider problem” – sellers on some e-commerce platforms or those that frequently ship items via courier may not be compliant with provincial EPR obligations in the jurisdiction where those products are sent. Under the proposed regulations establishing a federal plastics registry, the federal government is seeking to address the free rider problem by requiring online marketplaces to (1) report on third-party sellers that are producers under EPR policies, that use their platforms to market their products or (2) register as producers for all the goods that sellers sell on their marketplaces.

Under the proposed regulations establishing the federal plastics register, producers would be required to report themselves both federally and provincially, and would be required to report on a universal set of data points including:

• Plastics placed on the market;
• Plastics collected for diversion;
• Plastics successfully reused;
• Plastics successfully remanufactured, refurbished or repaired;
• Plastics successfully recycled;
• Plastics incinerated for energy recovery; and
• Plastics exported and imported for recycling and final disposal.

The federal government is proposing to introduce reporting requirements for the federal plastics registry in phases. Each phase will introduce reporting requirements on producers of certain categories of plastic goods. Phase I is targeted to be implemented before the end of 2024 and would require reporting on certain of the data points for the highest priority categories of plastic, which include plastic packaging and electronics, and electrical equipment.

Moreover, the federal government also intends for the federal plastics register to support the implementation of recycled content requirements in the future. The government is concurrently researching and developing recycling capabilities for problematic categories of plastic goods including plastic packaging and personal protective equipment (PPE). Accordingly, we expect that accurate records of the types of the plastics entering the market, coupled with continued investment into Canadian recycling infrastructure, will lead to another tranche of regulation setting out mandatory minimum recycled content requirements for various categories of consumer goods, including plastic packaging of consumer products. Where recycled content requirements are not practicable, i.e. for certain types of PPE, other design requirements such as composability of medical masks may be implemented. 

A continuing trend in the post–COVID-19 pandemic era is an increased use of online marketplaces. However, in many cases, the applicability of consumer product regulations to these sellers is unclear or inconsistently applied. We expect that explicitly imposing federal reporting requirements on online marketplaces is just the beginning of increased regulation of these sellers, both through new regulations with a clear applicability to online players, but also through increased enforcement clarifying the applicability of existing consumer product legislation on these players.

Finally, it appears that Canada and the US are aligned in their commitment to further regulation of plastic and plastic packaging. In the US, the Break Free From Plastic Pollution Act of 2021 was introduced in the Senate and proposes single-use plastic bans at the federal level comparable to those now in force in Canada, as well as strict guidelines on making recyclability claims and increased accountability for producers of plastic packaging.

For inquiries regarding regulatory requirements applicable to plastics in consumer products and their packaging, please contact Monica Song (monica.song@dentons.com) and Yulia Konarski (yulia.konarski@dentons.com).

The author gratefully acknowledges the contribution of Rachel Kuchma, Student at Law.

To read other articles in the Dentons’ Pick of Canadian Regulatory Trends to Watch in 2023 series, click here.

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