SURVOL DU SECTEUR DE L’INDUSTRIE AUTOMOBILE AU CANADA

SOLICITATION K2AA0-14-0002

OVERVIEW OF THE AUTOMOTIVE INDUSTRY SECTOR IN CANADA

I. INTELLECTUAL PROPERTY & CONFIDENTIALITY

Intellectual Property

Environment Canada has determined that any intellectual property arising from the performance of the work under this Contract will be vested in Canada on the grounds that the main purpose of the Contract, or of the deliverables contracted for, is to generate knowledge and information for public dissemination (section 6.4.1 of the Treasury Board of Canada Secretariat Policy on Title to Intellectual Property Arising under Crown Procurement Contracts).

Confidentiality

It is understood and agreed that the Contractor shall, during and after the effective period of the ensuing contract, treat as confidential and not divulge, unless authorized in writing by the Departmental Representative or his/her delegate, any information obtained in the course of the performance of the ensuing contract.

Subject to the Access to Information Act, R.S. 1985, c.A-1, the parties agree that the terms of this Agreement are confidential and each party shall use the same degree of care to prevent disclosure of the terms of this Agreement to third parties as it uses to protect its own confidential information of similar nature. Any failure of the Contractor to respect the confidentiality obligations is a default of the Contractor for which the Minister may terminate the contract.

STATEMENT OF WORK

II. BACKGROUND

On December 8, 2006, the Prime Minister, along with the Ministers of the Environment and Health, unveiled the first phase of Canada's Chemicals Management Plan (CMP I). The plan takes immediate action to regulate chemicals that are harmful to human health or the environment.

A key element in CMP I was the collection of information on the properties and uses of the approximately 200 chemical substances identified through the categorization process as high priorities for action. This information is used to make decisions regarding the best approach to protect Canadians and their environment from risks these substances might pose. This initiative, known as the "Challenge", was announced in a Notice published in the Canada Gazette.

In October 2011, the Government of Canada announced the launch of the second phase of the Chemicals Management Plan (CMP II) to continue its commitment to protecting the health and environment of Canadians. As part of the second phase of the CMP, approximately 500 substances in nine groups have been identified as priorities for action. These nine groups of substances are planned to be assessed and, if necessary, managed for potential risks to human health and the environment.

As a major user of chemicals, the automotive industry is one of the sectors impacted by the CMP. The automotive industry has also been actively engaged in various environmental initiatives that aim to minimize exposure to chemicals such as energy conservation, reduction of VOC emissions, development of environmental management systems, and reduction of water use and waste, etc.

The Canadian automotive industry is faced with several challenges with respect to the implementation of the CMP due to number of factors:

• Ascertaining the precise chemical content of the thousands of component parts that comprise automobiles. Approximately 8,000 to 10,000 different parts are ultimately assembled into approximately 100 major motor vehicle components, including suspension systems, transmissions, and radiators. These parts are eventually transported to an automotive manufacturing plant for assembly .
• Complex nature of the supply chain, particularly given that they are usually the users of these material and chemicals; and
• Different sources of release and exposure sources through the vehicle lifecycle (e.g., exposure associated with end-of-life, wear debris, consumables and maintenance liquids) and manufacturing processes (metal finishing, painting, foundry operations).

The automotive sector is a major component of Canada's manufacturing sector, accounting for large shares of cross-border trade, manufacturing sales and manufacturing gross domestic product. In 2012, the automotive industry sector employed 115,000 persons in Canada, which represented 7.7% of all manufacturing jobs in the country. Of this total, 64,300 employees were in parts manufacturing, 37,200 were in motor vehicle manufacturing and the remaining 13,600 were in motor vehicle body and trailer manufacturing .

III. OBJECTIVE

To undertake a review of environmental and health issues related to the use, releases of and exposure to chemicals of interest and identifying best practices / forums within the sector that address chemicals management and related issues.

For the purpose of this contract, the automotive industry sector includes:

• Original equipment manufacturers (OEM) assembling and distributing (including within Canada and exporting).
• OEM’s with assembly operations located outside of Canada that are involved in the importation, distribution and servicing of these vehicles in Canada.
• Automotive Parts Manufacturing and accessories: This includes the fabrication of all components or sub-assemblies used by the automotive OEM sector in the assembly of motor vehicles, as well as parts intended for the replacement of damaged or defective components in the automotive after-market. This does not include “aftermarket operations involving distribution, sale, and use of automotive hard parts and fluids. For the purposes of this study, the automotive industry sector is considered to include both automobiles and light-duty trucks.
• Automotive recyclers (commercial enterprise that crushes, flattens, or dismantles for parts end-of-life vehicles).

For the purpose of this contract, chemicals of interest include substances or groups of substances used or released during the lifecycle of the automotive industry sector that are:

• Concluded / proposed toxic under the Canadian Protection Environmental Act 1999 (CEPA 1999), excluding: Greenhouse Gases , and Ozone-Depleting Substances (ODSs),
• Concluded / proposed non-toxic on the CEPA 1999, but for which a Significant New Activity (SNAc) Notice is planned or has been published (notice of intent or order),
• Under assessment or planned to be assessed under the Challenge initiative, the Non-Challenge initiative, the CMP substance grouping initiative, and the Petroleum Sector Stream Approach (PSSA), and
• Under consideration for the next phase of the CMP.

Based on available information, initial lists of chemicals of interest are included in ANNEX A. Please, note that these lists are not exhaustive.

IV. SCOPE OF WORK

The contractor must:

1. Develop a Canadian automotive industry sector profile including:
o Size and geographical distribution of the industry per revenue, number of employees, number of establishments, type of automotive products and quantity, market perspective and evolution. This data must also be broken down for each tier.
o Products characterization
o Economic trends over the past 10 years and future economic outlook for the 5 coming years.

2. Identify chemicals of interest for the automotive industry sector;

3. For the chemicals of interest:
o map the supply, distribution, usage / function, exposure and emission during the lifecycle of a vehicle from lower tier manufacturing of parts to end-of-life (ELV) processing;
o identify emerging industry trends and pollution prevention opportunities; and,
o compare levels of risks of releases and exposure at all stages of the vehicle life cycle.

4. Provide a review of industry driven information exchange tools that could provide insight into the chemical content of automotive products. This includes a description of these tools and their relevance and limitations regarding data gathering initiatives under the CMP;

5. Provide a comprehensive review of existing control measures and practices in Canada, U.S., European Union and Asia (Japan and South Korea) which aims to reduce health and environmental impacts of chemicals of interest.

6. Provide a review of existing industry driven tools that aim to better design automotive products by optimizing chemical selection and minimizing issues associated with ELV processing. This includes a description of these systems, their relevance and limitations regarding the future risk management activities under the CMP.

7. Articulate roles and responsibilities between various tiers within the automotive sectors and supportive industries (plastics, rubber, electronics, paints, etc.) regarding the chemical content of automotive parts or products used as part of the automotive manufacturing processes.

8. Identify existing government-industry practices / forums in Canada, U.S., European Union and Asia (Japan and South Korea) which aim to engage with the automotive industry in addressing environmental and health issues.

In order to achieve the objectives outlined above, the contractor must complete all the tasks described and provide the results of this research to the Departmental Representative in the form of a written report and an oral presentation.

This list of tasks is comprehensive, but may not necessarily be exhaustive. The Contractor is encouraged and expected to provide any additional information discovered during the contract period that is deemed relevant in fulfilling the objectives of this contract.

All the economic information must be provided in Canadian dollars. When monetary estimates are not available in Canadian dollars, foreign currency estimates must be converted and presented in Canadian dollars accompanied by an explanation of the exchange rates used.

Use of Canadian data should be prioritized over those from foreign sources (e.g., United States and European Union). When only foreign data is available, the Contractor should extrapolate the data for the Canadian market and support the extrapolation with valid assumptions (e.g., based on GDP, market share and demand in North America). All assumptions must be validated by two (2) industry experts.

A clear explanation of any assumptions used and calculations made must accompany any data provided.

Tasks:

The Contractor shall complete the following tasks and provide their outcomes as indicated in section entitled: Deliverables and Schedule.

Task 1: Information Gathering
Through literature reviews, the contractor must gather relevant information to achieve objectives of the study. The contractor must undertake at a minimum the following steps:

• Survey of existing literature including governmental and non-governmental databases and papers on:

o Socio-economic data on the Canadian automotive industry including a breakdown by OEMs, automotive part manufacturers and aftermarket
o Environmental and health issues associated with the automotive industry including risks and exposure of chemicals of interest;
o Use pattern of chemicals of interest;
o Existing control measures and practices in Canada, U.S., European Union and Asia (Japan and South Korea) which aims to reduce health and environmental impacts of chemicals of interest.
o Best management practices driven by industry with respect to chemicals of interest; and
o Existing supply chain management practices.

• Analyse information gathered and identify data gaps.

Task 2: Address data gaps
In order to address gaps identified in task 1, the contractor must undertake at a minimum the following steps:

• In collaboration with the Departmental Representative, develop a list of a minimum of 15 stakeholders to be interviewed. This list should be representative of key industry, government and non-governmental stakeholders (for example: automobile manufacturers, importers, parts manufacturers, associations, Transport Canada, Industry Canada, Environment Canada, U.S. EPA, etc.).
• Develop an interview questionnaire. The interview questionnaire must be approved by the departmental representative prior to distribution to stakeholders.
• Manage the survey with identified stakeholders including carrying out appropriate follow-up.
• Complete the data analysis initiated in Task 1

Task 3 – Sector profile
Based on information gathered in Tasks 1 and 2, develop a sector profile of the Canadian automobile industry including:

• Geographical and size distribution of the Canadian automotive industry (e.g., revenue, the number of employees, number of establishments by size and region, type of automotive products and quantity)
• Canadian market perspective and evolution;
• Information on the key automotive industry trade associations:

o Association name, purpose, mission, key members, number of members, contact information name, etc.).

• A review and analysis of the roles ,interactions, synergies and methods used between the particular industries within the automobile assembly and automotive parts manufacturing sectors from stages of lower tier manufacturing of parts to final automotive assembly. In articulating roles and interactions, the contractor must clearly identify how the decisions are made throughout the supply chain with respect to chemicals of interest being used, either as part of the manufacturing process and / or as a component in the item.
• A comprehensive review of existing control measures and practices in Canada, U.S., the European Union and Asia (Japan and South Korea) which aims to reduce health and environmental impacts of chemicals of interest.

Task 4 – Environmental and health issues Scan
In order to examine opportunities for integrated and sustainable pollution prevention actions, a comprehensive review of the environmental and health issues associated with the automotive sectors must be completed by the Contractor both from the manufacturing operations, through the vehicle life cycle to identify exposure and/or releases, wholly or partially resulting from the automotive industry sector activities or products.

This environmental review must include:

• Review of current and emerging industry processes;
• Identify chemicals of interest for the sector;
• Identification / explanation of the functions and the process stages where chemicals of interest are used, either as part of the process itself and/or as a component in the item;
• Identification / explanation of possible releases and/or exposure during the vehicle lifecycle stages (e.g. manufacture, use and ELV of vehicles)
• Comparison of levels of risks of releases and exposure at all stages of the vehicle life cycle.
• Identification of opportunities for pollution prevention at each stage of vehicle life cycle;
• Develop a comprehensive review of existing industry driven pollution prevention measures and practices within the automotive sector that aim to minimize exposure / releases of chemicals to the environment from the design to ELV of the vehicles. This review must include domestic and international practices.

Graphics such as process flow diagrams, narrative, and analysis of the main processes in both automotive assembly and automotive parts manufacturing operations in Canada must support the environmental review.

Task 5 – Identify and describe existing government-industry best practices / forums in Canada and the U.S. which aim to engage with the automotive industry in addressing environmental issues

To complete this task, the contractor must:

• Identify and explain how practices / forums are being implemented elsewhere within the Government of Canada and other jurisdictions including provincially and at the federal level within the United States.
• Identify the top five (5) government-industry practices / forums aiming to engage with the automotive industry in risk management or data gathering initiatives in North America (Canada, U.S., and Mexico). For each practice / forum, the contractor must provide a description of the practices / forums; identify key players’ roles and responsibilities, provide pros and cons of the approach and recommendations or its implementation in the context of the CMP.

Information Source Requirements
The primary objectives of interviews are to fill data gaps from the literature review and obtain stakeholders’ feedback. Therefore, the contractor must have exhausted all other possible methods of gathering the required information before contacting industry or industry associations with specific questions.

Prior to contacting stakeholders, the Departmental Representative must review the content of interview questions and contact lists. The Contractor is responsible for developing a contact list and ensuring the accuracy and completeness of the information. If available, the Departmental Representative may provide additional contact information to the Contractor. If requested by the Contractor, Environment Canada will also provide a letter of support to help the Contractor gather data from stakeholders.

Any information and reports provided to the Contractor by Environment Canada are to be treated as confidential. The information and documentation provided must only be used for the purpose of this contract and shall not be used for any other purposes unless duly authorized, in writing, by the Department Representative.

The Contractor must keep a record of discussion following any communication with industry. These records must contain the industry contact information, the subject of discussion, the questions posed or raised during the discussions, and any feedback received on the subject. The final report must include a list of persons contacted while gathering the information as well as their contact information including email addresses if available.

Deliverables and Schedule
Regular feedback (at least every two weeks) through email, and/or phone calls must be maintained between the Contractor and the Departmental Representative.

The Contractor shall provide the following deliverables:

Deliverable #1 – A detailed methodology and work plan: Based on discussions with the departmental representative during the initial meeting, the contractor must provide a final methodology and work plan.

This document must describe, in details, the methodology and the work plan with respect to requirements outlined in Tasks 1 to 5. This document must also reflect interactions with the departmental representative during the initial meeting.

Environment Canada will review this document and provide comments to the contractor within ten (10) working days after receiving the document.

Deliverable #2 – Draft Table of Contents: The Contractor must provide a draft Table of Contents which describes the structure of the proposed report and the content of the final report and a comprehensive bibliography that will support the study.

This must also describe the structure of the proposed content of the report including an executive summary. The titles of chapters, sections and subsections must be indicated with a brief description of their contents, and how they link to requirements of tasks 1 to 5.

Environment Canada will review and provide comments to the Contractor within ten (10) working days after receiving the documents.

Deliverable #3 – Final Table of Contents: The Contractor must address and incorporate all the Departmental representative’s comments on Deliverable #2 in the Final Table of Contents.

This must describe the structure of the proposed content of the final report including an executive summary. The titles of chapters, sections and subsections must be indicated with a brief description of their contents, and how they link to requirements of tasks 1 to 5. This document must also include a comprehensive bibliography that will support the study.

Environment Canada will review and provide comments to the Contractor within ten (10) working days after receiving the documents.

Deliverable #4 – Interim Report: The Contractor must provide one electronic copy of the Interim report. The interim report must contain all the study findings and reflect work on tasks 1, 2, 3 and 4 as per the Statement of Work.

The interim report must cover tasks 1, 2, 3 and 4. The report must provide all the findings and the interpretation and the analysis of data including but not limited to identification of the gaps, correlation with existing data, assumptions and theirs supportive rationales and the limitations of the study. This interim report must also consider and address comments received during regular progress of the project and comments provided on Deliverables #1, #2 and #3.

Environment Canada will review and provide comments to the contractor within two (2) weeks after receiving the interim report.

Deliverable #5 – Draft Report: The Contractor must provide one electronic copy of the draft report. The draft report must contain all the study findings and reflect work on tasks 1, 2, 3, 4 and 5 as per the Statement of Work. It must incorporate / address all comments provided by the Departmental Representative on Deliverable #4.

Environment Canada will review and provide comments to the contractor within two (2) weeks after receiving the draft report

Deliverable #6 – The Final Report is required in three versions;
o Full final report;
o Final report unabridged with protected confidential business information (CBI) clearly identified; and
o A summary of the final report that is CBI-free (i.e., where individual company information is not revealed or cannot be revealed through deduction).

The final report must address all comments provided by the Department Representatives on the Draft report. It must be provided in three versions (one full report, one report with CBI and third party confidentiality-requested information highlighted and properly sourced, and one summary report that is CBI free). The Contractor must provide the report in hard copy and electronically in Microsoft Word (compatible with Microsoft Office Suite 2010) and Adobe Acrobat (PDF). The final report must cover all aspects of the Terms of Reference. The Contractor should take into consideration all the comments provided on previous deliverables.

All versions of the Final Report must incorporate / address all comments provided by the Departmental Representative on Deliverable #5.

Deliverable #7 – Oral presentation of the results: In person, the Contractor must give a 90-minute presentation including a question period to selected Environment Canada staff using Microsoft PowerPoint, and present the key findings of the report. .

The Contractor must provide a deck and make oral presentation using Microsoft PowerPoint (compatible with Microsoft Office Suite 2010). This presentation should last at least an hour and half including a 30 minutes question period.

The background material, information or other material used to develop the main report must be documented in the report and be available to the Departmental Representative over the course of 5 years after completion of the report.

In addition to the final report, the Contractor must provide the Departmental Representative with:

• Hard and electronic copies (compatible with Microsoft Office Suite 2010) of all notes, text, graphics, surveys, raw data, spreadsheets and records of discussion used for the delivery of this Contract upon request.

All deliverables shall be provided no later than twenty-six (26) weeks after contract award.