Environmental concerns

Training and investment in technology and R&D are not the only costs of doing business. Canada's manufacturers must also budget for measures that protect the environment against pollution and minimize the impact of their operations on land and animals.

Increased interest shown by governments, businesses and society in environmental protection has influenced practices in the manufacturing sector. Changes to a company's practices can occur in response to environmental legislation, conventions or voluntary agreements. For example, businesses are mandated by legislation found in several acts, principally through the Canadian Environmental Protection Act, but they can also participate in voluntary environmental agreements, such as the Accelerated Reduction/Elimination of Toxics. Even the anticipation of government regulations, conventions or voluntary agreements can compel companies to institute changes to their operations in efforts to reduce their environmental impact.

Over the last dozen years, international conventions such as the Canada–United States Air Quality Agreement and the United Nations Framework Convention on Climate Change have also established environmental targets. Canada's agreement to and participation in these environmental protection conventions have a direct impact on how our manufacturers produce their goods.

The most recent revision to the United Nations Convention on Climate Change is the Kyoto Protocol, signed by Canada in 1998. Under this agreement, the Canadian government has promised to reduce greenhouse gas emissions to 6% below 1990 levels by the period from 2008 to 2012. As a result, Canada must cut emissions about 21% below the amount it is estimated we would otherwise have produced in 2010. Clearly, the achievement of this goal requires the government to involve both the general public and manufacturing industry.

In 2000, Canadian businesses spent $5.4 billion on environmental protection. This represented an increase of $700 million from 1998 expenditures. By far, most of the spending went into pollution abatement and control processes. These processes reduce the amount of undesirable substances expelled during the normal production process; however, they do not reduce the amount that is actually produced. In 2000, industries spent more than $2.3 billion on these processes. Within that total, manufacturing industries such as food spent over $130 million; the pulp, paper and paperboard mills industry spent approximately $349 million; and the transportation equipment industry spent $133 million. Another major expenditure was pollution prevention processes, which involve the development or modification of production processes to prevent or reduce pollutants before they are actually produced. Overall, industries spent more than $1.3 billion on such production modifications in 2000. Food manufacturers spent $38.9 million; pulp, paper and paperboard mills $208 million; and transportation equipment spent $204 million.