Canada's Chemical Actions Prioritize Economic Growth

The Canadian chemical industry is the country's fourth largest sector. It exported $119.9 billion in chemical and plastic products in 2024, and it supports more than 192,000 jobs across the country. It might also be the next site of conflict between the federal government and environmental advocates and researchers.

On June 18, 2026, parliament passed Bill C-30 as part of the spring economic update tabled on April 28, 2026. At the end of the bill, in a section called Division 8: Pest Control Products Act, is a statement that grants the federal government authority to permit the emergency approval and use of pesticide products, even if those products have been denied approval by the Minister of Health on the grounds of environmental risk.

On April 28, 2026, Environment and Climate Change Canada (ECCC) announced the publication of the Watch List Approach as part of the June 13, 2023, Strengthening Environmental Protection for a Healthier Canada Act amending the Canadian Environmental Protection Act, 1999 (CEPA). The Watch List contains substances that do not meet current criteria for being labeled as toxic but which could become toxic if exposure or hazard characteristics were to change.

With the looming economic threat of U.S. tariffs and the potential breakdown of the USMCA/CUSMA free trade agreement between Canada, the U.S., and Mexico, the Canadian government must tread a fine line between supporting the role of the chemical industry in the Canadian economy and fulfilling its mandate to protect human health and the environment.

Loosening Constraints on Pesticides

The federal government first announced its intention to revise the Pest Control Products Act and its agency, the Pesticides Regulatory Directorate (PRD), as part of the Spring Economic Update on April 28, 2026, promising to “include consideration of food security and cost of food” and providing $24 million over four years to “expand economic analysis capacity and to optimise the review processes for pest control products.”

The pesticide industry celebrated the news. CropLife Canada - a trade association representing manufacturers, developers, and distributors of pesticides - responded to the statement in a press release, saying that it has “long been advocating for structural change at the PRD to enable investment in Canada and elevate Canadian agriculture as a global superpower.”

The amendment allows the government to authorize the use of banned pesticide products “in the emergency control of a seriously detrimental infestation if the Governor in Council considers it necessary to do so to protect national economic security, regional economic security or national food security.” The order would be in effect for no more than three years, after which it can be renewed for another three years, and cannot be made if it violates any international agreements binding on Canada.

Several health and environmental organizations had expressed their opposition to the proposed amendment in a May 26, 2026, statement to Minister of Finance François-Philippe Champagne, noting that the Pest Control Products Regulations already allow the government to register pesticides for such emergency situations if they pose no environmental or health risk, and that in passing the amendment the government provided no rationale for enabling cabinet to circumvent the act's requirements.

“The amendments fail to specify criteria, requirements or democratic safeguards to constrain this extraordinary power,” the organizations said in the statement, noting also that the terms “national economic security, regional economic security or national food security” are not defined and do not specify requirements for how they would be considered.

In a separate letter to the Standing Committee on Finance, academic researchers noted similar concerns about the vague language regarding national security.

“There is abundant evidence for short and long term harms for many pesticide active ingredients,” said the researchers in the statement. “Therefore, the Pest Control Products Act specifically requires that all available scientific data on the exposure and toxicity risks are considered and that these risks are considered 'acceptable' when used according to label. When economics are used as a benchmark to allow registration, this is likely to be used as a mechanism by industry to influence regulatory decisions.”

In a press release, Ecojustice’s Healthy Communities Program Director Bronwyn Roe said that the government is gutting pesticide protections by burying the changes in omnibus budget bills and bypassing democratic debate.

“Bill C-30 introduces amendments that lets Cabinet override the Health Minister's science-based decisions to favour commercial interests - even when a pesticide poses unacceptable risks,” said Roe. “This has happened with no public hearings and no expert testimony. When science can be vetoed by Cabinet, Canadians should understand exactly whose interests are being served. It isn't theirs.”

Watch List Monitors Chemical Risk

ECCC published the Watch List Approach to outline how it will compile and amend the Watch List for substances that are capable of becoming toxic or have been determined to be capable of becoming toxic.

Substances on the Watch List do not currently meet the criteria for toxic substances under Section 64 of CEPA, but could be of potential concern as a result of future changes to exposure or hazard characteristics. Toxic substances already listed on Schedule 1 of CEPA cannot be added to the Watch List.

Substances can be added to the Watch List after an assessment under Part 5 of CEPA, after a review in another jurisdiction, or based on an evaluation or information by the ministers. The ministers will consider information such as the severity of the risk, disproportionately impacted populations, the function of the substance, and potential future uses or changes in exposure. Substances will be removed from the Watch List if they are moved to Schedule 1 of CEPA or if they are no longer considered capable of becoming toxic.

Health or Economics? Canada's Priorities for Chemical Industry

In a press conference on June 18, 2026, House Leader and Minister of Transport Steven MacKinnon attempted to downplay concerns about the changes to the Pest Control Products Act under Bill C-30.

“We would not use these measures - and cannot use these measures - if there are health hazards attached to them,” said MacKinnon, referring further questions to the Minister of Health Marjorie Michel.

Michel, however, has had little to say about the potential health threats from renewed use of pesticides. In an emailed statement to the Aboriginal People's Television Network, Michel's spokesperson Alexandre Bergeron reiterated the language of the amendment.

“With respect to situations in which economic security may be prioritized, these authorities are intended to be used only in exceptional circumstances and are not exercised lightly,” said Bergeron.

Michel has been actively engaged in discussions with the pesticide industry, which is unusual for a minister of health. In May, she held a fireside chat with industry representatives as part of CropLife's Spring Dialogue Days, after which she spoke on a podcast with agricultural media outlet RealAgriculture on her mandate from Prime Minister Mark Carney to reduce bureaucratic hurdles in the agricultural industry.

“We are working hand-in-hand with the sector,” said Michel. “We will go at the pace you [the agricultural industry] need us to go.”

Michel said that she is taking her cue from the agricultural industry to identify and prioritize regulatory irritants that can be quickly removed to boost economic growth, though not at the expense of protecting health and the environment.

“In everything we are doing right now, we have to put it through an economic lens,” said Michel. “But we shouldn't put that opposite to the health and safety of Canadians. We can do them both together.”

In the RealAgriculture podcast, CropLife President and CEO Pierre Petelle said that Michel's engagement with the agricultural industry was not only unprecedented for a minister of health but also a positive sign of the government's economic priorities.

“We couldn't get a meeting with the health minister before,” said Petelle. “To say that this is unprecedented is an understatement.”

Petelle drew a contrast between the economic prioritization of the agricultural and natural resources industries under Mark Carney and that of his predecessor Justin Trudeau.

“If you look at the paralysis of the past 10 years on any major initiative, whether it's pipelines, mines, or any infrastructure, the test for this government will be: When Prime Minister Carney runs into the inevitable opposition to a pipeline, a mine, a port expansion, and in our sector crop protection improvements, will they have the fortitude to say, 'No, we're going to get things done, we can't appease everyone, and we're driving an economic agenda.'”

3E regulatory specialist Rangalakshmi Muthuswamy said that Bill C-30 directly challenges and runs philosophically against the CEPA Watch List Approach.

“The Watch List operates on proactive environmental science, while Bill C-30's framework operates on reactive economic overrides,” said Muthuswamy. “The CEPA Watch List signals 'early warnings' for chemicals that could become toxic and serves as a tool of caution. Conversely, Bill C-30 would allow Cabinet to issue emergency orders to register or extend the use of a pesticide during a crop-infestation crisis, even where environmental assessments identify unacceptable risks.”

Muthuswamy said that these actions by the Canadian government signal a shift towards more dynamic, risk-based chemical and pesticide oversight, meaning regulatory attention can develop well before a substance is formally restricted. Companies could therefore face increased data, compliance, and supply-chain planning needs, while pesticide businesses could benefit from a more targeted re-evaluation system that focuses on regulatory resources on products where risks have materially changed. Businesses should monitor CEPA Watch List additions, Canada Gazette consultations, the Pest Management Regulatory Agency re-evaluation decisions, changes in exposure and use information, and emerging hazard data for substances in their portfolios.

“Customers should not treat Watch List placement as a restriction but should consider it an early regulatory signal to assess product exposure, alternatives, supplier dependencies, and available scientific and commercial data before requirements potentially tighten,” she said.

Companies should also note that while Bill C-30 and the Watch List challenge one another, they also potentially increase the due diligence required, and that Bill C-30 emergency authorization should not be treated as a complete “green light.”

“Companies would still need to screen the active ingredients, formulants, and potentially relevant contaminants against CEPA Schedule 1 and applicable risk-management instruments,” said Muthuswamy. “The Watch List should also be monitored as an upstream warning that the regulatory status could change even where the pesticide remains authorized today.”