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Manitoba's Tire Stewardship Program

RCC appreciates the opportunity to comment on the proposed tire stewardship regulation and Stewardship Regulation Guidelines for Industry Stewards, brought forward by Manitoba Conservation. 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 industry-led tire stewardship program for Manitoba. 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
The proposed tire stewardship regulation is based on the principles of extended producer responsibility and shifts the responsibility for scrap tire management from the current government-appointed Tire Stewardship Board to a new industry-led board.

RCC supports industry-led stewardship programs and supports the government's intention to transfer the existing tire stewardship program to industry leadership.

Definition of a Tire
The draft recycling regulation defines tire as "manufactured for use on the wheels of a powered vehicle or a trailer that is designed to be towed by such a vehicle and includes a tube that is manufactured for use inside such a tire, whether the tube is supplied in conjunction with a tire or separately."

While the draft Stewardship Regulation Guidelines for Industry Stewards provides a similar definition, it includes additional details including the types of tires that should be included in the program (those for licensed vehicles and off-road) and exemptions (tires for wheelchairs, medical devices and bicycles).

According to the Manitoba Tire Stewardship Board website, the current tire requirement in Manitoba is for a "new tire sold for highway motor vehicles and trailers."

Under the proposed definitions in the draft regulation, it is unclear which products will be affected by the regulation. RCC respectfully requests that Manitoba Conservation revise the tire definition contained in the draft regulation to clearly state which tires are included in the program, and which are exempt; this will provide greater certainty and focus and will result in a more effective and efficient tire stewardship program.

Where possible, RCC further recommends that Manitoba Conservation harmonize its tire stewardship program with other jurisdictions. To ensure consistency across all provincial jurisdictions, RCC recommends that the regulation clearly indicate the types of tires affected by the regulation (e.g., "farm tractor", "highway", "motor vehicle" and "trailer"), as they are defined in the province's Highway Traffic Act.

With respect to both the current list of tires covered and the process to include future products, RCC recommends that industry be given the authority to determine these decisions, with approval from the ministry, as part of their responsibility as stewards for the tire program.

While the government does have an important role to play with respect to monitoring success and ensuring accountability, we believe that it should be the stewardship board who be given the responsibility to conduct consultations and set appropriate timetables for the introduction of new waste tire products. This allows government to benefit from the input, knowledge and expertise of industry, and is in keeping with the principles behind moving to an extended producer responsibility stewardship model.

Prohibitions
Section 3(1) of the proposed tire stewardship regulation states that no person shall supply a tire for consumption unless the stewards or person operates or subscribes to a tire stewardship program.

RCC recommends that Manitoba Conservation revise this section to clearly specify that only new tires will be subject to a tire stewardship plan, on a go forward basis. As such, we recommend the word "new" be added before the word "tire" in section 3(1), to differentiate it from used tires, which will not be subject to a tire stewardship plan; which is consistent with other provincial jurisdictions.

Education and Awareness
Product stewardship is a shared responsibility and waste diversion programs will only be successful if consumers are aware of the program and see the benefits of participation. Educating consumers on stewardship issues is a fundamental component of any stewardship program. As the touch point for both consumers and manufacturers, retailers are a vital link in the supply chain and are strategically well positioned to assist in educating and increasing awareness among consumers.

Section 3(3) of the proposed regulation contains a requirement that point-of-sale information be made available to consumers, and the draft Stewardship Regulation Guidelines for Industry Stewards states that retailers are "required to provide" the point-of-sale information on the stewardship program. Furthermore, the guideline specifies that the establishment and administration of point-of-sale information for the program is a requirement that must be included in the stewardship plan.

While RCC agrees that point-of-sale information should be made available to consumers, we believe such educational material should be prepared and provided to retailers by the program administrator (e.g., Manitoba Conservation or Green Manitoba); it should not be the responsibility of the steward. This will ensure that a uniform message is delivered to consumers and will assist with increasing compliance with the program. This approach is also consistent with existing stewardship programs in other provinces.

Furthermore, RCC recommends that the costs for the establishment and administration of the point-of-sale information should be the responsibility of the program administrator, and should be included in the overall cost of the program; which is consistent with other jurisdictions. For example, the Alberta Recycling Management Authority includes awareness and education costs in the environmental fee charged to consumers on the sale of designated materials. It should not be the responsibility of the individual steward to fund the costs for the establishment and administration of point-of-sale information on the stewardship program.

Cost Containment
Section 4(2)(d) of the proposed regulation states that the tire stewardship plan must include a provision for "a system for the payment of expenditures incurred" for the administration and enforcement of Manitoba's tire stewardship program. RCC agrees that the management of costs incurred by the program should be left to the discretion of the industry funding organization.

However, in addition to provision (d) of section 4(2), provision (h) requires the stewardship plan to include a condition that "the payment of salaries and other costs of government for the administration and enforcement of this regulation and of the Act as it relates to tires."

RCC does not support section 4(2)(h) of the proposed regulation as it is inappropriate to require individual stewards to pay for government salaries and "other costs" for the administration of the program. Specific details of what the administrative costs may include (e.g., hiring an Executive Director or developing consumer educational materials) should be left to the discretion of the industry funding organization, as clearly outlined in section 4(2)(d).

Requiring the stewardship plan to include a provision for a system of payment for incurred costs is consistent with other provincial jurisdictions; whereas including a provision to compensate government salaries is inconsistent with other jurisdictions.

RCC recommends that clause (h) from section 4(2) be deleted from the proposed tire stewardship regulation.

Implementation Time Frames
When deciding upon the actual start date for these programs, RCC and its members recommend that retailers be provided with adequate time for implementation.

Section 5(1) of the proposed regulation states that "a person who intends to operate a tire stewardship program must submit a plan for the program and apply to the minister for approval of the plan." However, the regulation does not propose a schedule for program implementation, nor does it include a timeline for submitting a product stewardship plan.

RCC recommends that Manitoba Conservation revise the proposed regulation to include the applicable date (e.g., within X amount of days) for when a steward becomes subject to the regulation once it comes into force; as well as the applicable date for when a program operator must submit a product stewardship plan under section (4) of the proposed regulation.

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.

RCC is committed to working with our industry partners through the tire stewardship board and other affected stakeholders towards a timely and orderly transfer from the current program to the new industry-led model.

Visibility of Fees
The draft regulation is silent on cost recovery, while the guideline states that "applicants are responsible for determining material management methods and how the affected industry and potential program partners will bear the costs, or fund the program, subject to approval of government." The guideline also states that "fees required to support the program will be set and collected from product stewards."

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 transparency of costs.

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.

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.

Where possible, Manitoba should strive for consistency of fees with other programs, particularly those in adjacent provinces.

Collection
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).

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 Manitoba Conservation harmonize its tire stewardship program, where feasible, with existing tire stewardship programs in British Columbia, Alberta, Saskatchewan, Quebec, New Brunswick, Nova Scotia, PEI, Newfoundland and Yukon.

Retail Representation
As stated earlier, retailers have a significant stake in the development of effective stewardship programs. 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, or a retail representative, 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.

RCC has been actively involved in the government's Manitoba Tire Stewardship Working Group and is pleased to have retail representation on the new industry-led Tire Stewardship Board.