Welcome to RCC

RCC appreciates the opportunity to comment on the paint stewardship program proposal brought forward by Alberta Environment. Retailers, as the sellers of designated products and the touch point for both consumers and manufacturers, have a significant stake in the development of stewardship programs. Currently, RCC's members are active participants in over 30 such programs across the country, and will be called upon to expand their role as new ones are developed.

Indeed, retailers support the principles of waste diversion as a whole, and look forward to working together with other key stakeholders in creating a successful paint stewardship program for Alberta. The following represents the initial thoughts of retailers, which may be added to and/or refined as further discussion and consultation takes place.

Program Management
RCC agrees that paint should be a designated material under Alberta's Environmental and Protection Act.

RCC supports industry-led product stewardship programs and recommends that Alberta Environment engage in a competitive bid process to allow other providers to bid on managing Alberta's proposed paint stewardship program; rather than delegating program management to the Alberta Recycling Management Authority (ARMA).

RCC further recommends that the designated program manager must be accountable and engage in a transparent manner to government, brand owners, first importers, retailers and consumers.

Program Materials
Paint products to be placed under the paint stewardship program will include latex, oil and solvent-based architectural coatings, aerosol paints and stains, and empty paint containers; any applicable paint product in a container of 23 litres or less will be part of the program; and paint containers under 100 ml in size will be exempt from the fee but collected under the program.

Overall, RCC agrees with the inclusion of these products in the proposed paint program and further encourages Alberta Environment to harmonize its paint program with other jurisdictions as closely as possible.

Program Expenditures
The proposal states that costs associated with the program will be the same as other Alberta stewardship programs and will include material management; education, awareness, research, market development; measurement and reporting; and program administration.

As part of the education expenditure, RCC recommends that Alberta Environment provide point-of-sale program materials that retailers can make available to consumers, which will assist in encouraging their participation. This approach is also consistent with existing provincial stewardship programs, as well as Alberta's electronics recycling program.

Program Fees
RCC agrees that Alberta should strive for consistency of fees with other programs, particularly those in adjacent provinces.

For retailers, the visibility of fees is a critical component of any product stewardship program. Alberta Environment's proposal outlines that the program will be funded through environmental fees remitted by paint manufacturers and brand owners and/or first sellers, which can then be passed on to consumers.

Retailers support the consumer/user pay principle. We recognize that waste is a societal issue, and as such, we all share a responsibility in the management of used or leftover products.

A critical component of the consumer/user pay principle for retailers is the visibility of eco-fees. RCC is pleased that Alberta Environment is proposing to allow the visibility of fees as it is outlined in the proposal that paint retailers may choose whether they show the environmental fees separately on the sales receipt, or include them in the price of the product.

RCC and its members do not support any legislated or regulatory requirement that retailers bury the eco-fee within the final selling price of the product; a position that is consistent with the practice of programs in other provinces, including Alberta's electronics and tire recycling programs which permit visible fees.

Transparency of costs associated with stewardship programs provides retailers with the flexibility required to cover recycling program costs in a manner that minimizes the financial and administrative impact on their business. Transparency of costs also provides an important opportunity to educate consumers about a stewardship program, and hence encourage their participation.

RCC has analysed the consequences of hidden fees and identified a number of serious impacts on retailers both large and small:

• Retailers who lease their premises pay more rent: rent is based on gross sales, which increase as prices are increased to cover stewardship program costs. This is a particularly troubling concern for small, local retailers.
• Higher advertising costs are incurred for national or regional retailers who must produce separate production runs with province-specific pricing.
• Some national and regional retailers have information systems that are not easily (or simply cannot be) configured for higher prices in a given province for the same product.
• Product prices in the province may become inflated as a result of the mark-ups that occur along the supply chain.
• Some retailers lose customers to neighbouring jurisdictions where the advertised price of a product is lower because there is not an imbedded eco-fee.
• The program creates an un-level playing field for retailers within a province.

In addition to visibility of eco-fees, RCC and its members generally agree that there should be a standardized or flat fee per product category, as opposed to a negotiated fee. This is vital to program clarity and success. Moreover, with the same fees being charged by all retailers, a level playing field is established amongst industry.

Collection and Processing
Under the existing voluntary Household Hazardous Waste Program, municipalities operate roundups and permanent collection depots throughout Alberta. It is proposed that existing paint collection procedures will be modified to discontinue on-site bulking at collection sites, and to introduce a reusable bin system to collect paint; RCC supports this so long as the bin system is introduced in a recycling depot and not associated with the retailer.

RCC and its members understand the importance of ensuring that consumers have reasonable access to collection points, particularly in remote areas. An issue of concern, however, is that one method that is consistently proposed to achieve this objective is a return to retail collection system.

RCC has reviewed the issues arising if retail stores acted as collection points for used or leftover consumer products and packaging. These issues include:

• Lack of space to store used products;
• Need for renovations to accommodate returns (additional ventilation, closed rooms, racking etc.)
• Need to hire additional staff to handle incoming used products;
• Need for specialized staff training to handle incoming used products;
• Employee and customer health and safety associated with handling and storing used products;
• Store insurance coverage;
• Store fire code compliance;
• Store municipal by-law compliance;
• Administrative costs; and,
• Breach of lease provisions.

Accordingly, RCC and its members do not support any legislated or regulatory requirements that used or leftover consumer products and packaging be returned to retail.

That being said, occasionally some retailers and their suppliers may operate specialized take-back events for used or leftover consumer products. Any product stewardship program should recognize these voluntary programs and allow retailers the flexibility to operate them.

With respect to deposit return, this could possibly be an option as long as it is not associated with return to retail. In other words, retailers for the most part see their role as collecting the eco-fee, but not collecting used products (the waste).

Implementation Time Frames
The proposal does not refer to timing for the implementation of the paint stewardship program. RCC respectfully requests that program implementation not begin between the beginning of October and the end of January. This time period is the busiest for retailers and the detailed program implementation requirements that are necessary would not be possible to achieve during this time frame.

When deciding upon the actual start date for these programs, RCC and its members recommend that retailers be provided with adequate time for implementation. Retailers have expressed concerns in other jurisdictions with the extraordinarily quick pace that governments have allocated for the development of product stewardship programs. Retailers require ample time and opportunity to fully digest any program plan, budget for it, and take the necessary steps to prepare their respective organizations for compliance with the program. This is compounded by the fact that retailers are engaged in the development of other stewardship programs, which can leave them resource challenged.

Once a program has been approved, every impacted retailer will need to be informed of their obligation, which may involve a steep learning curve for some retailers. Retailers will have to identify and catalogue all of their branded and imported paint, and in many cases, implement data management systems in order to calculate and report on their obligations — not to mention hire and train employees. By providing adequate time, the ability of retailers to implement and comply with a program will increase.

Harmonization
Inter-provincial harmonization of product stewardship programs is a fundamental concern for the retail sector. The need for regulation to encourage harmonization with other provinces cannot be overstated. Approaches to product stewardship across Canada are far from consistent and increasingly place national retailers in the position of having to comply with a patchwork of requirements across the country. Implementing different programs in every province has proven to be costly and administratively burdensome for retailers; and as such, harmonization must be entrenched as a foundation of product stewardship programs.

RCC strongly recommends that Alberta Environment harmonize its proposed paint program as much as possible with existing paint stewardship programs in British Columbia, Nova Scotia and Saskatchewan; Product Care Association currently manages each of these stewardship programs.

Retail Representation
As stated earlier, retailers have a significant stake in the development of effective stewardship regulations. In addition to being sellers of designated products, RCC's members are increasingly also product brand-owners themselves and are responsible for the end-of-life management of those products and packaging. Given the major role that retailers play in product stewardship, retail must be represented in the decision-making bodies. Currently, RCC is represented on many stewardship boards across the country including Stewardship Ontario, Waste Diversion Ontario, Product Care Association, Tire Stewardship British Columbia and the Saskatchewan Scrap Tire Board, among others.

Given retailers important role in product stewardship it is imperative that RCC be more involved with ARMA's decision-making process. RCC must have a retail seat on ARMA's Board of Directors and/or an observer status seat; especially if ARMA is to be delegated as the paint program manager. Currently, the retail industry is not explicitly represented on ARMA's existing Board of Directors; previously, a retailer has held the "industry-at-large" seat.