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Manitoba and Ontario: Alternative Approaches to Recycling and Funding

November 1, 2003

Manitoba, Canada, is home to a broad recycling initiative that radically departs from most Canadian provinces' traditional reliance on bottle deposit systems. Ontario is poised to implement a complex municipal waste diversion program that places the onus of much of its funding on private companies. Of Canada's ten provinces, eight have enacted bottle deposit laws1—Manitoba and Ontario are the exceptions.2

What price success? Beverage Manufacturers Subsidize Broad Recycling in Manitoba

In 1995, the Manitoba Product Stewardship Corporation (MPSC) was formed to maximize the amount of material collected and recycled within the province. The MPSC is an independent, non-profit organization that represents Manitoba's government, local municipalities, industry, and consumers; it is currently funded solely by a 2 cent (CDN) levy on designated beverage containers, including carbonated soft drinks, water and beer, with most other containers, such as dairy containers being exempted.3 Unlike other Canadian provinces that depend on beverage deposit systems, Manitoba, through the MPSC, has implemented a multi-material recycling system that collects and recycles a much broader range of household materials than merely beverage containers—but on the backs of beverage manufacturers. The system has produced steady increases in the amount of material recycled each year with 49,367 metric tons passing through processing centers in 2002.4

MPSC itself operates as a control center and clearing house for all the recycling efforts carried on inside the province. With this broad mandate, MPSC has experimented with inventive techniques to facilitate recycling among the various municipalities in Manitoba. For instance, while MPSC is responsible for initiating general recycling policy, it remains up to individual municipalities to design specific recycling programs based on the needs of each community. Municipalities may even choose whether the actual recycling work will be completed by municipal employees or contracted out to private companies.

MPSC's system focuses on the collection and recycling of mandatory and optional recyclable materials. Under Manitoba's Waste Reduction and Prevention Act (WRAP)5, 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 and beverage containers, and polyethylene terephthalate (PET) #1 plastic bottles. Optional materials that may be collected and recycled range from telephone directories to juice boxes. MPSC does not actually require that certain methods are followed in adhering to this standard; rather, MPSC supports municipalities through a variety of methods designed to promote and facilitate community recycling efforts.

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. MPSC also has initiated numerous marketing campaigns with the goal of promoting recycling efforts. Many of these efforts came in the form of outdoor billboards with slogans such as "Use Less/Live More," "Don't Trash Cans," and "If You're Not Recycling, You're Throwing It All Away." MPSC offers collection and processing evaluations, on-site and technical evaluations, transportation assistance, and cost analyses. During 2001/2002, over 50 communities and organizations received market and technical support from these voluntary programs, but it remains up to local governments to decide on the best course of action.

There is no question that Manitoba has seen impressive overall results from their recycling efforts: the Manitoba multi-use system collected 50 percent of eligible household materials in 2002 and recycled 30,000 more metric tons than if beverage containers alone had been targeted.6 While the overall gains to multi-material recycling have been significant in Manitoba, the costs have been high—namely, the beverage industry alone has been targeted to fund the effort. To pay for these programs and fund the MPSC, a mandatory 2 cent levy was imposed on all beverage containers (excluding dairy products). Currently, this is the only method of funding for the program, although MPSC's website acknowledges that "Multi-material stewardship" where beverage containers are not the only materials levied "remains an important goal."7

Ontario Blue Box Program Plan Temporarily on Hold; Waste Diversion Act Likely to Be Implemented in 2004

The Waste Diversion Act,8 passed in 2002 by the Ontario Parliament, requires all companies that introduce packaging and printed paper into the province to fund 50 percent of Ontario's "Blue Box" municipal waste diversion program. The obligation falls on "brand owners, first importers, and franchisors doing business in Ontario" who generate Ontario sales in excess of $2 million Canadian dollars and who generate more than 15 tons annually of Blue Box wastes in Ontario.

Blue Box wastes are defined broadly by the Blue Box Program Plan—developed by Waste Diversion Ontario and Stewardship Ontario to implement the new funding scheme—as wastes that consist of any combination of glass, metal, paper, plastic, and textile.9 The Blue Box Program Plan notes that the definition encompasses packaging and printed materials as well as a wide range of consumer products. However, the Blue Box Program Plan only encompasses consumer packaging material and printed papers commonly found in the residential waste stream, given that municipal Blue Box programs have not traditionally collected consumer products.10

The definition of packaging is likewise broad, and "largely based on the European Parliament and Council Directive on Packaging and Packaging Waste (94/62/EC)"11:

"Packaging" shall mean all products made of paper, glass, metal, plastics, textiles or any combination thereof to be used for the containment, protection, handling, delivery and presentation of goods, from raw materials to processed goods, from the producer to the user or the consumer.12

In addition to standard packaging items, disposable packages/containers that are filled at the point of sale, or "service or in-store packaging," are captured by this definition and considered to be packaging that triggers the funding obligations. These include paper or plastic retail carry-out bags, disposable plates and cups, take-out and home delivery food packaging (e.g., pizza boxes), and food wraps provided by a grocer for meats, fish, and cheese.13

The Blue Box Program Plan has not yet been approved by the Ontario Minister of the Environment. Although the October 3, 2003 provincial election has delayed approval and implementation of the Blue Box Program Plan, approval and implementation is still expected, but probably not until 2004.

Once the Ontario Minister of the Environment approves the Blue Box Program Plan and "sets the day of obligation," brand owners and importers that are subject to the law (estimated to be 5,000-10,000 companies) will be able to formally register with Stewardship Ontario. Compliance Guidebooks are to be issued to registrants to assist them in complying with the law's requirements. Each company registering will be permitted to designate a company "Primary Contact" who will have access to Stewardship Ontario's on-line Data and Reporting & Management System.

Stewardship Ontario has designated draft fees for funding Ontario's municipal waste diversion program for different material types 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.14 A draft first year fee schedule set by Stewardship Ontario imposes the highest fees on plastic packaging, 6.692 cents/kg waste generated, covering polyethylene terephthalate (PET) bottles, high density polyethylene bottles, plastic film and plastic 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, to an apparent credit of—5.465 cents/kilogram for aluminum cans and foil.15

Failure to comply with the law is subject to enforcement action as provided by Sections 36 through 41 of the Waste Diversion Act. Individuals who violate the Act are subject to daily fines not to exceed $20,000; corporations are subject to fines as high as $100,000 for each day of violation.

Ontario's approach to waste diversion, while far more equitable than Manitoba's in terms of its funding, promises to be extraordinarily complex and confusing in its implementation. For more information on the Ontario Blue Box Program Plan or Manitoba's Product Stewardship Corporation, or bottle deposit legislation in the remaining Canadian provinces, please contact us at www.PackagingLaw.com.

FOOTNOTES

1 In Canadian provinces utilizing deposit-return systems, consumers pay a deposit, which may be recovered once the product is returned. Consumers in these provinces may also pay a non-refundable handling fee that funds community beverage recycling programs.

2 Prince Edward Island requires that all carbonated beverages be bottled in refillable containers.

3 See http://www.mpsc.com/main.asp?contentID=16.

4 The province has seen a steady increase in the amounts of material recycled each year. See http://www.mpsc.com/main.asp?contentID=24 for the latest amount recycled.

5 See http://web2.gov.mb.ca/laws/statutes/ccsm/w040e.php for a copy of the Waste Reduction and Prevention Act.

6 See http://www.mpsc.com/pdf/MPSC_AnRprt_screen.pdf  for the 2003 annual report.

7 See http://www.mpsc.com/main.asp?contentID=20 .

8 See http://www.wdo.ca/content/?path=page81+item36537.

9 Blue Box Program Plan, Section 2.1 ?Definition of Blue Box Wastes,? February 8, 2003.

10 Id.

11 Blue Box Program Plan , Section 2.1.1 ?Definition of Packaging Materials,? February 8, 2003.

12 Id.

13 Id.

14 See http://www.stewardshipontario.ca/bluebox/pdf/BBPP2003/BBPP_Feb28_Chapter9.pdf.

15 Id.