Canada's Recycling Programs Make Producers Pay

Date: Mar 01, 2004

Of Canada's 10 provinces, eight have enacted bottle deposit laws to encourage and fund recycling efforts. Manitoba and Ontario are the two exceptions — and in a big way.

    • Manitoba uses a tax on certain beverage containers to fund broad recycling initiatives.

    • Ontario will implement a complex municipal waste diversion program on April 20, 2004, that places the onus of much of its funding on private companies.

Are these aberrations or harbingers of things to come?

Manitoba: Everybody benefits, but few pay
Unlike other Canadian provinces that depend on beverage deposit systems, Manitoba, through the Manitoba Product Stewardship Corp. (MPSC), has implemented a multi-material recycling system. Although they collect and recycle a range of household materials and not just beverage containers, they do it on the backs of beverage manufacturers.

The program is currently funded solely by a 2 cent (CDN) levy on designated beverage containers, including carbonated soft drinks, water and beer. Most other containers, such as dairy containers, are exempt.

MPSC's system focuses on the collection and recycling of mandatory and optional recyclable materials. Under Manitoba's Waste Reduction and Prevention Act (WRAP), MPSC must establish and administer policies that require the recycling of newspapers and flyers, magazines, aluminum and beverage containers, glass food and beverage containers, steel food/beverage containers and polyethylene terephthalate (PET) plastic bottles. Optional materials that may be collected and recycled range from telephone directories to juice boxes.

Last year, MPSC distributed over $6.5 million in direct recycling support payments through an incentive based system by which each municipality receives payments based on the number of metric tons recycled by that particular community.

Authorities estimate that the Manitoba multi-use system collected 50% of eligible household materials in 2002 and recycled 30,000 more metric tons than if beverage containers alone had been targeted.

While these overall gains have been significant in Manitoba, the costs have been high &mdash at least to the beverage industry, which alone has been targeted to fund this effort. Although MPSC's website acknowledges that "Multi-material stewardship &mdash where beverage containers are not the only materials levied &mdash remains an important goal," in fact, it has not happened and is not on the horizon.

Ontario: More pay, but still, is it fair?
Ontario's recycling program may avoid this inequity to the beverage industry, but only by spreading the levy to a lot of companies doing business in Ontario. Brand owners and importers who sell products in Ontario will be required to formally register with Stewardship Ontario by April 20, 2004. For more info, visit www.stewardshipontario.ca.

The Waste Diversion Act, passed in 2002 by the Ontario Parliament, requires all companies that introduce packaging and printed paper into the province to fund 50% of Ontario's "Blue Box" municipal waste diversion program. Wastes included in the plan encompass packaging and printed materials, as well as a range of consumer products; but only consumer packaging materials and printed papers commonly found in the residential waste stream are collected.

In addition to standard packaging items, disposable packages/containers that are filled at the point of sale, or "service or in-store packaging," are also included. These include paper or plastic retail carry-out bags, disposable plates and cups, take-out and home delivery food packaging (such as pizza boxes), and food wraps provided by a grocer for meats, fish and cheese.

The fees for funding Ontario's municipal waste diversion program for different material types are based on three factors: (1) the recovery rate of a particular waste in a particular year, (2) the net cost of recycling each material through municipal Blue Box programs in a given year, and (3) the "disproportionate contribution" made by some Blue Box wastes to successfully diverting wastes from disposal.

A draft first year fee schedule set by Stewardship Ontario imposes the highest fees on plastic packaging — 6.692 cents per kilogram waste generated — covering polyethylene terephthalate (PET) bottles, high-density polyethylene bottles, plastic film and laminates, polystyrene and "other plastic."

This compares to 0.028 cents/kg newspaper waste, 3.633 cents/kg for steel food and beverage packaging waste, 4.728 cents/kg aseptic packaging waste and an apparent credit of "-5.465" cents/kg for aluminum cans and foil.

Failure to comply with the law is subject to enforcement action and can result in daily fines not to exceed $20,000 for individuals and $100,000 for corporations for each day of violation.

Ontario's approach to waste diversion, while possibly more equitable than Manitoba's in terms of more evenly spreading the pain, promises to be extraordinarily complex and confusing in its implementation.

More important, however, is the underlying scheme of both programs, which hide the cost of recycling programs as levies on industry and businesses, which will inevitably pass these costs on to an unwitting and unexpecting public.

Regardless of the legitimacy of the concept of producer responsibility, it's also important for the public to know that you don't get nothing for nothing.

Used with permission. Copyright FOOD & DRUG PACKAGING, March, 2004. For further information about this article, please contact George G. Misko at 202-434-4170 or by e-mail at misko@khlaw.com or Catherine Nielsen at 202-434-4140 or by e-mail at nielsen@khlaw.com