Welcome to RCC

The Hon. Roland Haché
Minister of Environment
Government of New Brunswick
Marysville Place
P.O. Box 6000
Fredericton, NB E3B 5H1

Dear Minister Haché:

On behalf of Retail Council of Canada (RCC) and our members operating across the province, I am writing regarding the New Brunswick Regulation 2008-54 under the Clean Environment Act, which gives Recycle New Brunswick the mandate to develop a new paint recycling program. Of concern to RCC is that retailers will be prohibited from displaying any fee associated with such a new program visibly on the sales receipt.

RCC is a not-for-profit, industry-funded association representing more than 40,000 store fronts of all retail formats across Canada, including department, specialty, discount and independent stores, and online merchants. The retail industry is one of the most competitive and vibrant sectors of New Brunswick's economy, creating more than $9.3 billion in sales last year. Employment in the retail sector represents about 12.2 per cent of the province's total employment, directly employing nearly 48,000 citizens. The contributions made by this economic sector are felt in every corner of the province and affect the lives of all New Brunswickers.

Retailers, as the sellers of designated products and the touch point for both consumers and manufacturers, have a significant stake in the development and implementation of product 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.

On April 30, 2008, your government announced the establishment of a new multi-material stewardship board, called Recycle New Brunswick, to oversee the development of Extended Producer Responsibility (EPR) waste diversion programs for materials designated under the Clean Environment Act. New Regulation came into effect May 1, 2008, and gives Recycle New Brunswick the mandate to develop a new waste paint stewardship program.

The Regulation includes a stipulation that retailers will not be permitted to charge a consumer a separate fee for costs associated with the paint program. In other words, the regulation prohibits retailers from displaying the fee associated with a new paint program as a separate line item on the sales receipt. Thus, retailers will be forced to bury the fee within the final selling price of the product, which has many serious impacts on both large and small retailers:

• 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.

By interfering with the way retailers do business and forcing them to hide fees on paint, it could cause many retailers, especially cross-border retailers to be placed at a competitive disadvantage if New Brunswickers are comparing paint prices in adjacent jurisdictions such as Quebec, Nova Scotia, Prince Edward Island and Maine. Consumers may cross the border where the advertised price of paint will be lower because there is not a hidden fee.

RCC's industry-wide position is that it is each individual retailer's decision on how they wish to manage environmental levies (or "eco-fees") associated with provincial product stewardship programs. Retailers require flexibility to determine what works best for their business model and whether or not their information and point-of-sale systems can be reconfigured to accommodate different prices (for national and regional retailers). As such, RCC and its members believe that government regulation and legislation must be silent on how fees are managed, as this is a business decision, not a government decision.

RCC does not support the government's decision to mandate hidden fees for its new paint stewardship program.

RCC Advocacy History and Background
In 2006, amendments were made to the Clean Environment Act to provide the Minister with authority to designate materials to be managed by industry. The amendments to the Act (commonly referred to as "Bill 15") also provided the Minister with the authority to prohibit visible fees.

Throughout 2006, RCC, along with several other like-minded and affected industry associations, lobbied against the provision to prohibit visible fees and met with the then Minister Holder and his senior staff numerous times explaining the need to remain silent on the management on fees. Summary of lobbying efforts:

• February 1, 2006 — Joint letter to Minister from RCC, Corporations Sharing Responsibility (CSR) and Food and Consumer Products of Canada (FCPC) regarding the proposed Bill 15 and requesting the removal of clause r.26, which proposed prohibiting visible fees.

• March 16, 2006 — Conference call with RCC, CSR, FCPC and the then Minister Holder and his staff, providing additional information on industry's collective position on the need for legislation to remain silent on fees. The Ministry agreed to delay moving the bill to the Committee of the Whole House until after RCC, CSR and FCPC had an opportunity to meet with the Minister in person. Overall, it was believed that the Minister was receptive and understood industry's position to remove the clause.

• April 29, 2006 — RCC, CSR, FCPC met with then Minister Holder in person and again, it appeared the Minister was receptive to industry's concerns.

• June 22, 2006 — Bill passes with clause in place

• September 18, 2006 — General election, Liberal majority elected

• November 16, 2006 — RCC letter to the new Minister of Environment, The Hon. Roland Haché, outlining the retail industry's position on the management of fees and asking that he not use his authority to prohibit visible fees when designating new products under the Act.

• January 9, 2007 — Received response from Minister Haché that the Department of Environment will take into consideration the information provided by RCC as it proceeds forward with the development of new programs.

  Clearly, the current Minister did not take into account the retail industry's position on the management of fees since the government designated paint and prohibited the visibility of fees. RCC voiced its position numerous times but for reasons which have not been clearly communicated, were not addressed by your government.

  Inadequate Opportunity for Input
  It is absolutely unacceptable that the government did not engage with the retail industry prior to releasing the new Regulation. RCC was told by Department staff that consultations on the draft regulation were completed at the end of 2004. Since that time it appears the regulation sat idle with no further communication or consultation with affected industry stewards and then without any warning, the government released its new regulation on April 30, 2008; a regulation which has significant impacts for New Brunswick retailers.

  Retailers are a key stakeholder in the development of product stewardship programs and governments across Canada look to us as they develop new regulations and legislation. RCC represents all retailers across Canada, including paint retailers in New Brunswick. We have a vested interest in the development and implementation of product stewardship programs and must be consulted on as we are the largest association representing the retail industry in Canada.

  If New Brunswick truly wanted EPR programs, they would allow for affected industry stewards to participate on the multi-material stewardship board, which is currently only comprised of Ministerial public appointments.

  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.

  Currently, RCC, or a retail representative, is represented on many stewardship boards across the country including Stewardship Ontario, Waste Diversion Ontario, Tire Stewardship British Columbia and the Saskatchewan Waste Electronic Equipment Program Board, among others.

  Given the major role that retailers play in product stewardship, retailers must be involved in program plan development and implementation and must represented in the decision-making bodies related to product stewardship programs.

  We are extremely disappointed with your government's lack of consultation and your decision to interfere with how retailers operate by mandating hidden fees for the paint program.

  This is a critical issue to our members and I will have my staff follow up with your office in the near future to schedule a mutually convenient meeting time to discuss how we can come to a resolution on this issue. If you require any further information or clarification, please do not hesitate to contact me at (888) 373-8245.

  Sincerely,

  Diane J. Brisebois
  President & CEO

  cc: The Hon. Shawn Graham, Premier
       Mr. Frank LeBlanc, Department of Environment
       RCC Environment Committee