The environmental regulatory playing field continues to change in response to economic conditions and court decisions. Economic or budget considerations have also affected Canada’s federal regulator.
Cuts at Environment and Climate Change Canada
The Canadian Federal Government is reducing the headcounts at several federal agencies. According to The Professional Institute of the Public Service of Canada, the reductions affect Environment and Climate Change Canada (ECCC), Transport Canada, Fisheries and Oceans Canada, and Innovation, Science and Economic Development Canada.
On January 26, 2026, ECCC confirmed that approximately 1,000 employees would be affected by the job cuts.
The Canadian Underwriter reported that the pressure to cut the ECCC budget goes back to August 2025. “In August, ECCC was tasked to reduce its budget by $43 million in 2024–25, $63 million in 2025–26, and $91 million annually starting 2026-27 or $1.3 billion by 2030.”
The Canadian Underwriter article stated that Prime Minister Mark Carney has pledged to enforce greater fiscal discipline and free up roughly $9 billion to meet Canada’s North Atlantic Treaty Organization (NATO) defence spending commitments and fund other big-ticket spending items.
Changes at Environment Canada and changes to federal environmental regulations (Photo by Praveen Kumar Nandagiri on Unsplash).
Update to Regulating Plastics
Single Use Plastics
In our December 10, 2025, blog post, we updated the changes to regulating single-use plastics. Specifically, we shared that on December 20, 2025, the single-use plastics export ban was revoked.
Federal Plastics Registry
As we shared in our July 11, 2025, blog, Canada’s mandatory reporting under the Federal Plastics Registry began on September 29, 2025 (Phase 1 of 3 Phases). The 2025 Phase 1 reporting is based on 2024 data.
It was recently announced that ECCC has delayed all reporting requirements under Phases 2 and 3 of the Federal Plastics Registry. No new reporting date was provided.
From the law firm Bennett Jones, “Environment and Climate Change Canada (ECCC) recently notified stakeholders of its intent to delay the reporting requirements with respect to Phases 2 and 3 of the Federal Plastics Registry (FPR). The deadlines for reporting with respect to Phases 2 and 3 of the FPR are set to come into force in September 2026 and September 2027, respectively. Phases 2 and 3 reporting expand on the scope of Phase 1 reporting to add reporting requirements with respect to plastics (packaging and certain products) destined for commercial, industrial and institutional waste streams, as well as information on the generation and management of certain plastic wastes, among other requirements.”
However, if you are required to report under Phase 1, you will still be required to provide the data for 2025 (in 2026) and 2026 (in 2027).
The reason for the delay, according to a blog by the law firm McMillan, “is in response to the complexity, cost, and challenges faced by companies to compile the data needed to comply with the Notice.”
Plastics as CEPA Toxic
On April 23, 2021, the Government of Canada issued an order “Adding a Toxic Substance to Schedule 1 to the Canadian Environmental Protection Act, 1999.” This designation is the basis for the ban on single-use plastics. Since that order, there has been debate and litigation.
Then, on November 16, 2023, the Federal Court of Canada released its decision in Responsible Plastic Use Coalition v. Canada (Environment and Climate Change). The Court declared that the federal government’s Order adding plastic-manufactured items (PMI) to the Toxic Substances List in the Canadian Environmental Protection Act (CEPA,1999) was “both unreasonable and unconstitutional.”
On January 30, 2026, the Federal Court of Appeal affirmed that PMI’s are Toxic under CEPA.
While the ruling does not impose any immediate obligations on companies, it does mean, short of a successful appeal to the Supreme Court of Canada, that additional regulations/obligations will affect the regulated community.
For a deeper dive into this ruling, see the blog by Miller Thompson, “Canada’s latest plastics decision and what it means for your ESG strategy.”
If you need assistance with an environmental assessment, permitting, etc., we can help. For more information or for assistance, contact Christopher Paré, P.Geo., at 519-948-7300, Ext. 114.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for more than 45 years. He has written hundreds of blogs and articles. His published work includes HazMat Magazine, BizX Magazine, Michigan Lawyers Weekly, GreenStone Partners, Manure Manager Magazine, and Progressive Dairy.
Christopher Paré, P.Geo, reviewed this blog. Chris is a senior geoscientist and manager of Dragun’s Windsor, Ontario, office. Chris has more than 30 years of experience on projects ranging from environmental site assessments (Phase One/Two ESA), excess soils, remedial investigations, soil and groundwater remediation, Permits to Take Water, Records of Site Conditions, vapour intrusion, and site decommissioning. Chris is a frequent speaker, author, and expert witness. See Chris’ bio.
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