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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 your intention to make amendments to the existing Used Oil Regulation by shifting the current model to an Extended Producer Responsibility (EPR) model.

RCC is pleased that we have been invited to participate in the Department of Environment's stakeholder consultation taking place on August 14, 2008. As the sellers of designated products and the touch point for both consumers and manufacturers, retailers have a significant stake in the development and implementation of product stewardship programs and we look forward to providing our feedback.

Of concern to RCC and its members is that the Department of Environment has said that the "associated fees will be internalized into the price of the product (oil, oil container and/or oil filter)." As you know from previous correspondence, RCC does not support any legislated or regulatory requirements that retailers bury the fee within the final selling price of a product.

I would like to take this opportunity to respond to the concerns you raised with the visibility of fees, as outlined in your letter dated June 23, 2008 to RCC (enclosed) regarding our concerns with hidden fees for the new paint program, to help better explain our industry's position on the management of environmental fees and why it is a business decision, not a government decision. There are a number of inaccuracies contained in your letter that merit clarification, as outlined below.

"...visible eco-fees increase the cost to consumers as program delivery and administration costs are downloaded directly on to consumers ...producers will not be required to accept any of the environmental and economic costs of managing their product at the end-of-life stage if there is a fixed and visible eco-fee in place."

Visible fees increase the cost of the designated product to the consumer. So do hidden fees. This fee is a fee-for-service for the consumer to do their part and be able to drop off the product at the end of its useful life so that it can be recycled and kept out of New Brunswick's landfills.

Retailers believe the transparency of program costs provides an important opportunity to educate consumers about a stewardship program, and hence encourage their participation. The Alberta Recycling Management Authority's 2005-2006 Annual Report included results from a 2005 survey that showed that over 60% of Albertans support the environmental fee for recycling electronics and nearly 70% support the environment fee added to the purchase of new tires. When consumers understand what the fee is being used for, they accept their responsibility. Consumers want to be responsible environmental stewards.

Program delivery and administration costs are not downloaded to consumers. There are significant costs associated with stewardship programs and many RCC members have dedicated staff solely responsible for complying with environmental regulations, assisting in the development of stewardship programs, reporting and remitting their obligations to stewardship agencies across the country, creating internal inventory management systems to track the designated products they report on, developing consumer education programs, and managing the used products they receive through their own voluntary take-back events. That takes significant financial and human resources. Retailers spend millions of dollars on these activities every year and more of our members are putting additional resources into managing the growing number of environmental programs.

It is evident that industry has accepted the costs of responsible environment stewardship. It must be understood that this acceptance is in no way connected to how a fee is managed at the point-of-sale.

Environmental stewardship is a shared responsibility. We all — industry, government and consumers - have a role to play to reduce our collective environmental footprint, and a price to pay in the management of waste.

"The Government of New Brunswick has evaluated the fee structure and have concluded that visible eco-fees at the point of sale are not supportive of the goals of EPR and that they do not provide incentive for 'Design for Environment'."

We believe that the management of fees — regardless of whether they may be visible, hidden or absorbed by the business — has nothing to do with EPR. EPR is a policy approach directed by government, while the management of fees is a business decision. True EPR should allow the producer to decide how best to manage the program.

The main features of EPR policy include shifting responsibility away from municipalities or provincial waste management authorities toward the producer; and to provide incentives to producers to incorporate environmental considerations in the design of their products.¹ Design for environment (DfE) is a component of EPR policy but is not impacted by the management of associated environmental fees. Manufacturers must be compelled to change the design of their products. This could be done through regulatory standards, incentives, responding to customer demand, and an internal desire to decrease the manufacturers' environmental footprint. DfE is a manufacturer's issue and has nothing to do with how fees are displayed at point-of-sale; the management of fees is a retailer issue.

As this is an industry issue, RCC would be interested in seeing the government's evaluation of the fee structure and why they concluded that visible fees counter the goals of EPR. To this point, given the major role that industry plays in product stewardship, affected stewards must be permitted to participate on the Recycle New Brunswick Board of Directors (which is currently only comprised of Ministerial public appointments) so that they can provide their input on these issues and assist in developing viable programs. Furthermore, allowing stewards to participate in provincial stewardship boards is consistent with the practice of other provinces.

"EPR programs are gathering strength across the country and issues concerning the non-visible fees are being discussed in many jurisdictions."

Product stewardship programs are indeed gathering strength as more provinces mandate the development of waste diversion programs for various materials. However, the model used for such programs varies across the country to accommodate each province's specific requirements/regulations, placing national and regional retailers in the position of having to comply with a patchwork of different requirements. Implementing different programs in every province has proven to be costly and administratively burdensome for retailers. As such, we believe that harmonization must be entrenched as a foundation of product stewardship programs to encourage compliance and administrative efficiency.

The issue of visible fees has been widely discussed in many jurisdictions and there seems to be many misconceptions about what the fees are used for. The fees associated with existing product stewardship programs are not taxes. Most of the existing programs are industry-operated and no part of the fee is remitted to the government. They are used exclusively to cover program expenses such as depot costs, collection, transportation, recycling, and consumer education.

It is important to realize that all other provinces have chosen to remain silent in their stewardship legislation regulations on the issue of prohibiting visible fees. In fact, the Government of Nova Scotia originally intended to mandate hidden fees when they added electronic waste to their Solid Waste-Resource Management Regulations but after consulting with affected industry stakeholders they reversed their decision and decided to remain silent on how fees are managed in their regulation, recognizing that this is a business decision, not a government decision.

Conclusion
For true EPR, the Government of New Brunswick must allow industry the flexibility to determine how best to manage the fees associated with the management of used oil in the province as this is a business decision, not a government decision. Further, the government should permit affected industry stewards to participate on the Recycle New Brunswick Board of Directors.

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

/Enclosure: Letter to RCC from Minister Haché

cc: The Hon. Shawn Graham, Premier
Ms. Rachel Bard, Deputy Minister, Department of Environment
Mr. Frank LeBlanc, Recycling, Department of Environment
Mr. Gregory Shanks, Director of Stewardship, Department of Environment
Ms. Liane MacFarlane, Director of Policy and Strategic Planning, Department of Environment
Murray Driscoll, Chair, Recycle New Brunswick Board of Directors
Christine James, RCC Atlantic Canada Office
Rachel Kagan, National Manager, Government Relations (Environment), RCC
RCC Environment Committee