Listed And Lawful: Canada's Federal Court Of Appeal Upholds Federal Government's Listing Of Plastic As Toxic

Background

In 2021, the federal government listed "plastic manufactured items" ("PMI") as toxic substances under Schedule 1 of the Canadian Environmental Protection Act, 1999 ("CEPA"). This was the first step under the CEPA two-step framework which enables the Minister of Environment and Climate Change to list toxic substances and develop regulations aimed at preventing and controlling plastic pollution. Those efforts ultimately led to the federal ban on certain single‑use plastic items, including checkout bags, cutlery, polystyrene food containers, stir sticks, and plastic straws.

In 2023, the Federal Court set aside the Governor in Council's order listing PMI as toxic substances under the CEPA. The Federal Court found that the federal government's decision to classify PMI as toxic was overly broad, unsupported by sufficient evidence, and an unconstitutional encroachment into provincial jurisdiction. In the Federal Court's view, the federal government had failed to demonstrate that all PMIs cause harm to human health or the environment.

Federal Court of Appeal Decision Key Take-Aways

On January 30, 2026, the Federal Court of Appeal ("FCA") unanimously overturned the decision of the lower court, restoring federal jurisdiction over the regulation of plastic pollution under CEPA and the listing of PMI as a toxic substance under Schedule 1.

In doing so, the FCA held:

• PMI may properly be listed as a "substance" under CEPA. The FCA rejected the argument that plastic manufactured items fall outside of the CEPA's definition of "substance," confirming that manufactured items can be regulated where they meet the statutory criteria.
• The federal government acted reasonably in listing PMI as toxic. The FCA emphasized that the CEPA does not require proof of actual harm in every instance. Rather, Parliament deliberately adopted a precautionary framework: a substance may be listed if it may enter the environment and may cause harm. The scientific evidence before the Governor in Council supported the conclusion that PMI may cause harm.
• The burden to challenge regulations is high. With the benefit of the Supreme Court's decision in Auer v. Auer, 2024 SCC 36, the FCA reiterated that administrative decisions creating regulations, such as the decision to "list" a substance, benefit from a presumption of validity that is difficult to surmount.
• The listing does not intrude on provincial jurisdiction. The FCA reaffirmed that environmental protection is an area of shared jurisdiction and that Parliament is entitled to act where provincial measures alone are insufficient to address a national and transboundary problem. Importantly, the FCA accepted the submission of the Attorney General of British Columbia, who argued "compellingly" that provinces face practical limitations in combatting plastic pollution, and that the federal government is often best positioned to regulate widespread and diffuse sources of environmental harm.
• Courts are not science review panels. Writing for a unanimous FCA, Justice Rennie found that courts are not meant to reassess the underlying science or substitute their own views for those of expert decision‑makers. Rather, the role of the reviewing court is to assess whether the decision was reasonable considering the statutory framework and the evidence before the decision‑maker. In that vein, the FCA described the Federal Court's approach as "a classic example of a court engaging in a line‑by‑line treasure hunt for error," rather than assessing the decision as a whole. The FCA found that the CEPA does not require absolute scientific certainty, nor does it require that every plastic item be independently proven harmful before the federal government can act.

Why the Decision Matters

The FCA's ruling has significant implications for environmental governance in Canada. Listing PMI as toxic under the CEPA gives the federal government the tools to continue to regulate plastic materials across their entire lifecycle, from design and manufacturing to use, disposal, and recycling. The ruling emphasizes that the burden to successfully challenge a "listing" decision under the CEPA is high. Challenging at the regulatory step may prove more promising for parties who have been unjustly targeted by sweeping regulation.

The decision to designate PMI strengthens the federal government's proposed plan to add the entire Perfluoroalkyl and Polyfluoroalkyl Substances ("PFAS") class, excluding fluoropolymers, to the CEPA's toxic substances list. This intention was announced in the March 2025 State of PFAS Report.

We're Here to Help

McCarthy Tétrault's National Environmental Group is advising clients across all industries and sectors on how to respond to reporting obligations under the CEPA. Please feel free to reach out to our team with any questions to help you determine your company's specific reporting obligations.

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