Advocacy & Policy

Ontario: Submissions

Re: RCC Comments on Ontario's Blue Box Program Plan Review
February 27, 2009

Waste Diversion Ontario
45 Sheppard Avenue East, Suite 920
North York, ON M2N 5W9
Via E-mail: BBPPReview@wdo.ca

On behalf of Retail Council of Canada (RCC) and our members operating across the province, we are pleased to provide comments on Waste Diversion Ontario's Draft Preliminary Report For Consultation: Blue Box Program Plan Review (February 6, 2009).

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 — including Ontario's Blue Box, Municipal Hazardous or Special Waste and Waste Electronic and Electrical Equipment programs — 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 Waste Diversion Ontario and other key stakeholders in ensuring that any changes to Ontario's Blue Box Program Plan are viable.

The following represents the initial thoughts of retailers, which may be added to and/or refined as further discussion and consultation takes place.

Definition of Extended Producer Responsibility
In theory, RCC supports the concept of Extended Producer Responsibility (EPR). However, it is a complex concept and one that conjures up competing and different definitions: a simple search on Google for the definition of EPR shows over 150,000 results.

Overall, RCC supports the Canadian Council of Ministers of the Environment's (CCME) definition of EPR as "an environmental policy approach in which a producer's responsibility for a product is extended to the post-consumer stage of a product's life cycle" (as defined in the CCME Canada-Wide Principles for EPR).

That said, it must be recognized that a producer's responsibility under EPR can include either financial responsibility for the management of the products and packaging and/or the physical responsibility for the management of products and packaging.

RCC recommends that the definition of EPR must be flexible enough to recognize that there is no "one size fits all" solution and that while full EPR may work for some programs, shared responsibility works for others.

RCC further recommends that the definition and the role of the "producer" be clearly defined (ie. manufacturer of the product/packaging or the first seller/importer?)

Shared Responsibility
RCC strongly supports the shared responsibility model for Ontario's Blue Box program and recommends that it be maintained. The program is one of the most successful and productive partnerships between industry stewards and Ontario municipalities.

The shared responsibility model for the Blue Box program recognizes that waste diversion itself is a shared responsibility as we all — industry, all levels of government and consumers — share an important and key role in the management of waste. Only by working together can we influence consumer behaviour and reduce our collective environmental footprint. The Blue Box program has exceeded its 60 per cent waste diversion goal and this success is largely attributed to the effective and efficient shared responsibility model.

Shared Responsibility of the Blue Box program provides incentives to both industry and municipalities to ensure that packaging choices move towards reduction and enhanced recyclability, while municipalities are encouraged to find greater effectiveness and efficiency in how materials in the Blue Box are recovered and recycled. Designed to financially support municipal Blue Box programs, it has also help build transparency and accountability in the system.

While the Ontario Minister of the Environment has requested that WDO provide guidance on how the province should shift the Blue Box program to an EPR approach, RCC maintains that it is critical that the definition of EPR be flexible enough to recognize the different models of responsibility (ie. full or shared) depending on the program. For Blue Box, shared responsibility works and should be preserved.

Program performance
The Blue Box Program (BBPP) has reached its 60% waste diversion target. A new target may encourage further increases in waste diversion. Recommend a new target for the next 5 years of the BBPP that goes beyond the 60% target originally set for the 2004-2008 period.

RCC supports waste diversion as a whole but we believe that the most effective approach to developing a new target for the BBPP should be based on four inter-related questions:

1. What is an achievable waste diversion target through reduction, recycling and composting?
2. What are the most effective policies and practices to reach this goal?
3. How long would it take?
4. Would the benefits outweigh the costs?

We believe that a rigorous and comprehensive evaluation of the economic and environmental costs and benefits should be completed first before a new target is set.

During the fourth-quarter of 2008, the price of recyclables fell substantially due to the decline in the economy. Most materials fell to half their value and in some cases to no value. Market development for some materials (ie. plastic) has already been a significant issue for the Ontario Blue Box program and with this current downturn in the commodities markets, maintenance of processing and developing markets will be seriously impacted and should be taken into consideration when deciding upon a new five-year waste diversion target for the program.

Further, it must be recognized that targets will only be achievable if they are realistic and based on system capacity (ie. collection, processing, recyclability, market development) and consumer participation.

Consumer participation is critical to the success of the Blue Box program. Ultimately, it is the consumer who decides how to dispose of their waste. The role of the consumer must be considered when setting any new targets. If the consumer does not see the benefits of participating in the Blue Box program, targets will not be met.

Once WDO conducts such an evaluation based on economic and environmental costs, system capacity and the role of the consumer, we recommend that WDO work with Stewardship Ontario on developing an appropriate new target.

Material-specific performance
Certain Blue Box wastes are not achieving high diversion rates (e.g., plastics), and may benefit from material-specific diversion targets. Recommend material-specific diversion targets for Blue Box wastes to encourage further increases in waste diversion for the next 5 years of the BBPP.

At this time, RCC does not support WDO's draft recommendation #5 as we believe that for any type of target an economic and environmental cost benefit analysis must be done before setting such a target. In light of the recent downturn of the commodities markets, now may not be the most appropriate time to pursue material-specific diversion targets since most materials have lost a substantial amount of their value.

Simply put, targets will not be met unless consumers participate in the Blue Box program and understand what materials are recyclable and which aren't; and unless there exists end markets for those materials to be processed and recycled.

Stewardship Ontario is currently developing a market development strategy and RCC recommends that WDO postpone a decision on material-specific targets until Stewardship Ontario has had the opportunity to develop a market development strategy (to be completed before the fee setting for 2010).

Consistency across municipalities
The collection of different Blue Box wastes across Ontario municipalities creates public confusion. Recommend how the program can achieve greater consistency in the Blue Box wastes that are collected across Ontario municipalities to minimize public confusion, facilitate province wide communication and outreach activities, and encourage further increases in waste diversion for the next 5 years of the BBPP.

RCC wholeheartedly supports striving for a common, harmonized approach to the Blue Box program in Ontario. Harmonization is a fundamental concern for the retail sector. The need for regulation to encourage harmonization with other municipalities cannot be overstated. Approaches to the Blue Box program are far from consistent across Ontario, creating a patchwork of over 400 different municipal Blue Box programs across the province, making it confusing for all stakeholders. As such, harmonization must be entrenched as a foundation of Ontario's Blue Box program.

That said, it will be a challenge to reach this lofty goal as currently Ontario's over 400 municipalities operate at different service levels and they accept different materials for recycling at their Material Recycling Facilities. It gets even more complicated when one specific municipality, the City of Toronto, has distinct and unique powers under the province's Stronger City of Toronto for a Stronger Ontario Act, 2005, which allows Toronto to tax or ban packaging.

Furthermore, the province lacks an overall coordinated waste diversion plan for the province. RCC participated in consultations on the government's waste diversion strategy to divert 60% of waste from landfill by 2008 in Summer 2004 and Spring 2005 and yet a plan to reach this overall goal was never released. Ontario needs a waste management strategy that is cohesive otherwise we will continue to have a patchwork of programs.

RCC believes that there must be a reasonable process for making changes to the Blue Box program (ie. adding or removing materials); as such we support WDO's draft recommendation #7 to establish a process to select Blue Box materials to be collected in all municipalities based on specific criteria (such as per centage of Ontario households already receiving collection service for the material; capacity in the curbside collection container if collected at curbside; compatible with the depot collection system if collected at depot; ability to be managed in processing systems; will not contaminate other materials during processing; sustainable markets; and determine differential service levels (curbside or depot) to address regional variations based on specific criteria such as population, population density and/or location).

Furthermore, RCC recommends that WDO work with the Ontario Ministry of the Environment to amend its related regulations (101/94) under the Environmental Protection Act to harmonize municipal Blue Box programs across the province to ensure consistency.

Once the program does reach a level of harmonization we would recommend that WDO work with the province to undertake a province-wide consumer awareness and education campaign. As mentioned before, the success of any waste diversion program — including the Blue Box program — relies heavily on the role of the consumer who is ultimately responsible for making the final decision of how to dispose of a product/package. The less confused a consumer is, and the more aware they are of the benefits of participating in the Blue Box program (ie. separating their waste), the more likely they will be to participate and the more successful the program will be.

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. RCC would be pleased to work with WDO and the Government of Ontario to assist in consumer education awareness of a harmonized Blue Box program.

Problematic wastes
Some Blue Box or non-Blue Box wastes create operational inefficiencies for municipal recycling programs and may increase costs. An example of a problematic blue box waste is the 15 litre non-refillable water bottle. Recommend how problematic Blue Box and non-Blue Box wastes can be addressed through the BBPP or other mechanisms.

RCC does not support WDO's draft recommendation #9 to address management of problematic Blue Box products or packaging by implementing a regulatory mechanism to prevent moving a product or package from one collection system to another collection system unless the diversion rate for that item will be increased; and authorizing WDO to identify problematic materials, evaluate options for collecting and managing the materials in co-operation with Stewardship Ontario and provide direction to Stewardship Ontario on the management of problematic materials.

Regulating markets and collection systems could potentially stifle innovation and the development of end markets. Further, RCC does not support WDO's recommendation to identify problematic materials; Stewardship Ontario should continue to retain the authority to identify such materials.

RCC believes that the stakeholders that are responsible for packaging decisions need to be provided with clear definitions of what types of packaging are sustainable and compatible with recycling facilities. Clear, consistent and national guidelines are needed to assist them in their packaging choices to avoid problematic wastes. The Canadian Council of Ministers of the Environment is in the best position to be tasked with this as the membership of CCME is comprised of every provincial and territorial Environment Minister in Canada; and as packaging is seldom designed for a provincial market, this guidance should come from a national body such as the CCME. Increasingly, packaging is designed for continental and even global distribution systems.

The CCME Extended Producer Responsibility Task Group recently released the draft discussion paper: "Towards a Proposed Canada-wide Strategy for Sustainable Packaging" for consultation. We support CCME's goal of developing a framework for a Canada-wide strategy for sustainable packaging and believe WDO should wait until after the outcome of CCME's consultation before making any decisions related to problematic wastes, as it is directly related to the issue of packaging.

Blue Box wastes from the IC&I sector
The industrial, commercial and institutional (IC&I) sector generates more designated Blue Box wastes than the residential sector, but is not included in the BBPP. Recommend if, and how, the BBPP could be extended to include Blue Box wastes generated by the IC&I sector.

RCC does not support WDO's draft recommendation #16 to assess if, and how, the Blue Box Program Plan could be extended to include Blue Box wastes generated by the IC&I sector under full EPR.

RCC does not support extending the residential Blue Box Program to including wastes generated by the IC&I sector. Rather, the government should continue to work with affected industry stakeholders with the common goal of increasing the IC&I waste diversion rate and ensuring that impacted companies are complying with the existing IC&I Regulations.

Ontario has been a leader in the area of responsible waste diversion legislation for the IC&I sector. The 3Rs Regulations, which include Regulation 102/94: Waste Audits and Waste Reduction Work Plans, Regulation 103/94: Industrial, Commercial and Institutional Source Separation Programs, and Regulation 104/94: Packaging Audits and Packaging Reduction Work Plans; which have been in place since 1994 under the Environmental Protection Act.

These regulations provide the necessary laws for IC&I organizations to have in place waste reduction work plans, conduct annual waste audits and source separate their internal waste. The key to increasing the IC&I sector's waste diversion rate is to ensure that those who are impacted by the regulations are educated and aware of their regulatory obligations.

Further, it would be helpful to accurately know the current IC&I waste diversion rate in order to establish a benchmark and determine if more needs to be done; as such, RCC supports WDO's draft recommendation #15 to establish a system to compile data on IC&I sector diversion activities and determine an IC&I recycling rate.

Blue Box wastes collected outside of the Blue Box
Blue Box wastes not captured in the Blue Box are collected as garbage or litter by municipalities, fully at their cost. Recommend (1) how collection options beyond municipal curbside and depot could be used to increase collection of Blue Box wastes and (2) how steward responsibility can be used to address Blue Box wastes that are collected beyond municipal curbside and depot, or disposed as waste or litter.

RCC is concerned that this issue may be outside the scope of WDO though recognizes that the Minister specifically asked WDO for direction on this. To that end, we believe that this could be better addressed in a provincial waste diversion plan, as already mentioned we believe Ontario needs an overall coordinated waste management plan that addresses the issues of diversion, garbage/litter and the role of the consumer.

A province-wide consumer education and awareness campaign is needed to help educate consumers on their important role to divert waste through recycling and not littering in public areas.

In terms of recommending collection options beyond municipal curbside and depot, RCC recognizes that there is no one-size-fits-all solution and we need a myriad of collection options across the province. While we understand the importance of ensuring that consumers have reasonable access to collection points, particularly in remote areas, an issue of concern 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; such issues include a lack of space to store used products and employee and customer health and safety concerns associated with handling and storing used products. 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.

Additional Blue Box wastes
Some of the designated Blue Box wastes, such as plastic products, are not included in the BBPP. Recommend how the BBPP can be expanded to include additional wastes already designated by regulation within the program.

In general, RCC supports WDO's draft recommendations #23 and #24 to establish a process to evaluate whether other products or packages should be included and refer others for consideration under other regulations or WDO programs.

As a general rule of thumb, products or packages should not be added to the Blue Box program unless there exists end markets for those materials to be processed and recycled.

Environmentally responsible management
There are concerns that some Blue Box wastes may not be managed in an environmentally responsible manner, including waste marketed in Ontario or sent offshore. Recommend mechanisms that can be added to the BBPP to assure that Blue Box wastes are managed in an environmentally responsible manner from collection to final market.

RCC supports WDO's draft recommendation #10 to establish a material tracking system from collection to final disposition and promoting Ontario processing and end markets as part of Ontario's green economy. This supports the need to promote the development of local processing capacity to ensure there are adequate markets for collected materials. Together with a tracking system, promoting markets in partnership with government and promoting procurement specifications to support recyclability and recycled content will serve to improve the Blue Box program.

Stewardship fees
Current steward fees for certain Blue Box wastes may be too low to encourage either increased waste diversion or the use of materials in product manufacturing or packaging that can be easily recycled. Recommend how the steward fee structure can be revised to (1) increase the waste diversion rate for certain Blue Box wastes (e.g., plastics) and (2) encourage stewards to incorporate materials that are easily recycled into their products or packaging.

RCC does not support WDO draft recommendation #11 which proposes to incorporate penalties into the Blue Box fee setting methodology for materials that do not achieve material-specific targets. Industry stewards should not be penalized for failure to meet specific performance targets - waste diversion is a shared responsibility and penalizing stewards for not achieving performance targets for a program that impacts not only stewards but consumers and municipalities as well is not appropriate.

The same WDO draft recommendation also proposes to modify the equalization factor of Stewardship Ontario's Blue Box funding formula with the proposed material specific recycling targets from WDO's draft recommendation #5. As mentioned earlier, RCC does not support developing material-specific targets until such time that WDO conduct an evaluation of the economic and environmental costs and benefits before any new targets are set.

In terms of packaging decisions, for the most part retailers have limited influence on the design of packaging as it is the manufacturers who develop packaging for products. That said, many retailers have taken steps to reduce packaging for their private label brands, where possible, and in some cases have been working with manufacturers and influencing them to reduce packaging size and/or re-formulating their packaging. As mentioned earlier, RCC supports the CCME as the appropriate body to take the lead on developing a national sustainable packaging strategy. RCC recommends that WDO postpone decisions related to specific materials/packaging until the CCME completes its current consultation.

EPR funding
The BBPP does not reflect full Extended Producer Responsibility (EPR) funding since the WDA requires Blue Box stewards to fund 50% of municipal program costs, with municipalities funding the rest. Recommend how to move the BBPP towards full EPR funding. Since different collection and processing systems for Blue Box wastes are the result of decisions made by local municipalities, in your review and recommendation, please consider the potential impact to the management of municipal recycling programs as industry moves to full EPR funding.

As stated earlier, while we recognize that the Minister has requested WDO to provide a recommendation on how to move towards full EPR funding (ie. 100% industry funding), RCC believes that the shared responsibility model for the Blue Box program is working and should remain unchanged from its current 50/50 model between industry and municipalities.

However, if the Government of Ontario chooses to move forward with its desired intention and legislates to shift the cost of the Blue Box program wholly on to industry stewards then it must be recognized that the role of municipalities for the program could ultimately change. The proposed shift in responsibility not only means that industry would accept full financial responsibility of the program but it would also mean that industry would be responsible for the physical responsibility of the program as well. As such, industry stewards may decide to change the design and operation of the program as a whole in order to determine how best to meet government objectives and waste diversion targets.

The timing of such a transition should only take effect at least five years following the revisions to the Ontario Waste Diversion Act, 2002. Industry will need at least five years to undertake such a massive overhaul to the Blue Box program. As such, WDO's draft recommendation #13 should be revised to say: "The IFO will assume full financial responsibility for the Blue Box system after a transition period of at least five years following the revisions to the Ontario Waste Diversion Act..."

It should be noted that Stewardship Ontario has estimated that if all of the recommendations of WDO's consultation report are accepted, including a shift to 100% industry funding for the Blue Box program, would result in an increase of running the program from the current cost of about $83 million to over $300 million, representing a significant and potentially unnecessary increase of 270 per cent for Ontario businesses, during a time of severe economic softening. For these reasons, RCC recommends that WDO recommend that the Minister work with his provincial counterparts in the Ministries of Finance and Economic Development to conduct an analysis of the potential impacts of the Blue Box Program Plan Review before any decisions are made.

Conclusion
Thank you for the opportunity to comment on Waste Diversion Ontario's Draft Preliminary Report For Consultation: Blue Box Program Plan Review (February 6, 2009). We look forward to continuing to work with Waste Diversion Ontario and other stakeholders to minimize the environmental impacts associated with waste from consumer products. If you require any further information or clarification, please do not hesitate to contact us directly at (416) 922-6678.

Sincerely,

Diane J. Brisebois
President & CEO

Rachel Kagan
National Director, Environmental Affairs

cc: Hon. John Gerretsen, Minister of the Environment, Government of Ontario
Hon. Dwight Duncan, Minister of Finance, Government of Ontario
Hon. Michael Bryant, Minister of Economic Development, Government of Ontario
John Vidan, Director of Solid Waste Management, Minister of the Environment
Gemma Zecchini, CEO, Stewardship Ontario
RCC Environment Committee