Major grocers, retailers want changes to Ontario's recycling plan

Premier Doug Ford's government is facing corporate pressure to reverse Ontario's plan to have industry shoulder the full cost of blue bin recycling programs, CBC News has learned.

Two organizations led by some of Canada's largest supermarket chains, retailers and consumer goods companies want changes to Ontario's blue box rules as the industry faces a sharp increase in transition costs.

While the two corporate groups insist the changes they want won't weaken Ontario's recycling program or slow the shift of costs to companies, the push is raising alarm among municipalities and environmental groups.

The industry is “trying to shirk its environmental responsibilities,” said Ashley Wallis, deputy director of environmental protection.

“If manufacturers don't pay for this packaging, it's going to be taxpayers, it's going to be the environment or it's going to be human health, and it's going to be a big step backwards,” Wallis said in an interview.

Municipal governments fear that the changes will increase their costs and increase waste in landfills and litter on the streets.

Ontario's Recycling Cost Shift Plan

Ontario is in the process of shifting waste costs to municipalities and companies that manufacture and sell waste products.

With this shift, known as “extended producer responsibility,” industry will now bear the cost of recycling or recovering items such as tires, batteries, light bulbs and electronics.

Under the system, companies pay a fee based on the amount of waste material they generate to businesses that operate recycling programs called producer responsibility organizations (PROs).

It is up to companies to pass these fees on to customers or accept them as a cost of doing business. The theory is that the fees will encourage companies to reduce their packaging and other waste.

The transition to a fully cost-effective industry for the material that fills the blue bins – including beverage containers, paper, plastic, glass and metal – began just last year and will be completed by 2026.

Right now, companies are seeing blue box payments grow exponentially.

What industry wants to change

Circular Materials, the largest producer responsibility organization in the blue box sector, is actively lobbying the government for changes to the management of the blue box system that would save companies more than $100 million, according to a document marked “confidential” obtained on March 21. CBC News.

The board of directors The Circular Materials group includes executives from Loblaws, Costco, Coca-Cola, Maple Leaf Foods, Procter & Gamble and dozens of other major companies.

In its confidential document – a 38-page slide deck – Circular Materials urges fee-paying companies to pressure the government over the costs.

On a page titled “Next Steps,” a bolded sentence reads: “Recommend that manufacturers contact government officials to share their concerns about the impact of payments in Ontario as a result of the current Blue Box rule.”

Also, the Retail Council of Canada means Many of the same major retail and food players have called on Ontario's environment minister to push for similar reforms.

Many retailers rely on recycling in Ontario legislationIntroduced in 2016 by the then-Liberal government, “is the single largest source of red tape in Canada,” Retail Council vice-president Michael Zabane said in a November written submission.

The companies say the changes will save them $100 million

Allen Langdon, chief executive of Circular Materials, says he expected fees to double as companies moved to cover the costs of the blue box, but said he was “tremendously concerned” that the increase would be more.

“We meet with them every month, and the main topic we're discussing is the significant increase in fees over the last two years,” Langdon said in an interview.

“What we're seeing is four to six times what they paid, and we're not even halfway through the transition,” he said.

The solution Circular Materials is pushing for is that it wants the government to give it a monopoly as the sole producer responsibility organization for blue box materials.

“The current system has a lot of organizations involved in managing the system, which leads to a lot of duplication and inefficiencies,” Langdon said. “When you have an organization that keeps track of things, we have a much more efficient system.”

Langdon says the change will save companies $100 million.

The industry's claims have been questioned

However, other players in the sector question whether duplication is really to blame for the sharp rise in fees and caution against giving a monopoly to an organization run by the industry's biggest corporations.

• “Eliminating competition is not usually the answer to controlling costs,” said Gordon Day, vice president of Ryse Solutions, a small producer responsibility organization that competes with Circular Materials. According to Sun, administration is not the most important factor in raising waste management fees. Instead, he says, the cost of labor, trucks, fuel and insurance will increase.

• The Canadian Federation of Independent Grocers is concerned about the push. “Anytime we hear someone talk about efficiency and having everything under one company, red flags go up for us,” Gary Sands said.

• An umbrella group representing municipal governments says it's concerned the industry is trying to reverse what it calls a “strong effort” to reduce waste in Ontario. “This approach shifts the burden from taxpayers to polluters, incentivizing them to reduce waste at the source during production,” Brian Rosborough, executive director of the Association of Ontario Municipalities, said in an email. “Companies can reduce costs by reducing waste.”

Environmentalist Wallis says the big supermarket companies have sent customers home with too much “trash packaging” for years without any consequences.

“Now that they are financially responsible for collecting and managing waste, there are issues with how expensive it is,” he said.

Something that sellers want to change

The Retail Council's submission to government outlines nine changes the province wants to make to blue box regulations.

The most important include Ontario's recycling targets currently set by Cabinet. For example, the industry is committed to recycling 60 percent of all hard plastics by 2030. Companies that do not meet the target will be subject to fines.

Instead, retailers want to switch to a model set out in an industry-wide recycling plan submitted to the province for approval, as is the case in several other provinces, including British Columbia.

“In its current form, Ontario's legislative and regulatory framework is the least effective in terms of driving environmental goals in Canada,” said Michelle Wasilyshen, a spokeswoman for the retail trade council, in an email.

However, according to Environmental Defence, the model in other provinces has failed to increase recycling rates and targets are not being met.

Where is the Ford government

The government is not ruling out the changes that industry wants.

Andrea Hanjin, spokeswoman for the Environment Minister, said the government was working with producer responsible organizations as well as retailers to move to a fully producer-led blue box system.

“Last year, we held consultations to respond to industry feedback and identify ways for the government to reduce administrative burdens and ensure program continuity,” Hanjin spokesman Alex Catherwood said in an email. “We will continue to work with the sector on these priorities as the transition continues.”

Drink cans, bottles and boxes

In parallel to all this, the government is consulting specifically with industry stakeholders on ways to recover and recycle soft drink containers, including soft drinks, water bottles and juice boxes.

The beverage container industry group originally planned to fund the program by levying non-refundable fees on each packaged beverage purchased by Ontario consumers.

The government scrapped the plan and launched a consultation to create a deposit refund system for soft drinks, similar to the beer store's for cans and bottles of alcoholic drinks.

Provincial regulations require the industry to recycle 75 per cent of all soft drink containers by 2026 and 80 per cent by 2030.

Various insiders say the only way the industry can meet those goals is through a deposit refund system like the one in Quebec last fall. doubled the deposit in banks up to 10 cents.