Stewardship and recycling 101

A PRO is an organization retained by a producer to establish and/or operate a collection or management system for a regulated material or group of materials (e.g. batteries, tires, etc.). PROs often exist in provinces with full EPR systems whereas, stewardship organizations are more common where responsibilities are shared among stakeholders (e.g. municipalities, producers, etc.). A PRO will help your company understand your obligations as well as assist you with material collection and reporting, where possible. For more information, please see RCC’s webpage on things to consider when selecting a PRO, particularly if you are trying to decide between multiple PROs.

Ontario-based organizations (usually not-for-profit) that receive money from industry and represent the interest of stewards. IFOs often prepare and implement stewardship plans and programs on behalf of members. As of January 1^st, 2021, Stewardship Ontario will be the only remaining IFO in Ontario.

Plans developed and operated by a stewardship organization (e.g., Product Care Association) for a specific category of products sold in Ontario. The organization is responsible for the plan’s implementation and is accountable for achieving the plan’s objectives and targets.

Terminology for stewardship organizations/PROs in Quebec

A fee applied to a product that represents the cost to responsibly collect, transport, recycle and/or dispose of that product/material.

A policy approach whereby a producer’s responsibility is extended to the end-of-life/end-of-first-life stage of a product or material. The responsibility can be physical in terms of setting up collection/operational aspects and/or financial. Producers can usually take on responsibilities individually or collectively. For example, producers can collectively come together to form a producer responsibility organization (PRO) to handle obligations.

A policy approach whereby producers have an individual responsibility for the collection and disposal of the products/materials they supplied to the market as opposed to having stewardship organizations as the proxy obligated party under the regulation. IPR is currently only in effect in Ontario.

Things to consider:

• Whether your company is a resident in the province (or in Canada for some regulations)
• Whether your company is supplying something to a customer
• Whether your company is the brand holder, first importer, franchisor, etc.

In order to identify the obligated party, regulations will provide a producer definition. This definition can vary between regulations and provinces. 

Producer hierarchy:
Some regulations include a producer hierarchy to account for various producer scenarios.

Voluntary producers – in regulation or through commercial/remitter agreements:
Given today’s extensive supply chains, it can be challenging to identify the obligated party. Most provincial regulations allow for non-resident producers/stewards (if interested) to report and remit on behalf of their obligated retailers/dealers. This is particularly helpful for mid-sized businesses with limited capacity to handle administrative burdens associated with EPR.

In Ontario, businesses are facing a more complex situation as many manufacturers and distributers have their sole Canadian commercial establishment in that province. This means that Ontario regulations may be the only ones obligating a vendor whereas the retailer is the obligated party everywhere else in the Canada.

To solve this challenge, RCC is working to have commercial and remitter agreements recognized in regulations as they provide producers with flexibility to contract responsibilities up and down the supply chain. For example, a brand holder may prefer to have a retailer report on their behalf since they have more expertise. In this case, an agreement would be signed between the brand holder and retailer to shift that task but the legal obligation remains with the original producer. For programs like electronics, commercial and remitter agreements are a standard practice and are beginning to be formally recognized.

Paper and packaging regulations across Canada all have a threshold to limit the administrative burden and costs for small businesses. This also applies to some other regulations in Ontario (e.g., tires, batteries, electronics). Thresholds can be known as a de minimis or small business policy. The threshold is often based on gross revenue for a previous year(s) and/or the tonnage of materials supplied into the marketplace. Thresholds can also factor in number of employees, although this is less common.

If you are beneath a threshold, you will have fewer regulatory requirements. For example, in Ontario, you may still have to register but you may not have management requirements. In other provinces, you may be exempted from obligations altogether. It is important to remember that even if your company is de minimis in any given year, if your gross revenue/material tonnage increases in future years, you may no longer be under the threshold and will have more obligations.

• Registration
• Reporting (e.g., supply data)
• Funding
• Management (e.g., material requirements, accessibility requirements, etc.)
• Promotion and education
• Etc.

Across the country, regulations require producers to report on the amount of materials they supply into the market. This helps ensure the system is effective and transparent. Reporting is also important because it impacts how stewardship organizations set fees for producers. Depending on the number of materials/products your company supplies into the marketplace, there are various reporting methodologies that can be used for each province/program.

For example:

• Line-by-line reporting
  • If you have a limited inventory (limited number of SKUs), you can work through your inventory and report line-by-line.
• Develop a methodology
  • If you have an extensive inventory, you may have to develop a methodology to assist with reporting, either in-house, using templates provided by stewardship organizations/PROs or using an EPR consultant.
• Other
  • Some government agencies also develop reporting methodologies and have them live-in policy with the oversight agency. For example, average weights across product categories. This approach can be beneficial because methodologies/weights can easily be updated in a policy, as needed, rather than embedding them within a regulation.  

Most stewardship organizations/PROs have an easy-to-use reporting window that is consistent across the programs they are involved in. Stewardship organizations/PROs can also provide call centre support if there are any questions related to obligations and compliance.

Depending on the program, stewardship organization or PRO, the frequency of reporting can vary. Some programs/organizations require annual reporting while others require quarterly or monthly reporting. Depending on the program, PROs can also report directly to the Authority on behalf of producers.

All stewardship organizations conduct audits to ensure that data is being submitted accurately. In most cases, a stewardship organization, PRO or Authority will work with a producer if they are found to be out of compliance to correct any mistakes. In extreme cases, producers can be fined by the regulatory authority if they are not meeting their obligations.

In most provinces, producers have the ability to pass along program costs to customers through the use of environmental handling fees (EHF), also be known as eco-fees or container recycling fees (CRF). For a customer, these fees may show up on receipts when they go to buy a product that is managed under a stewardship program. These fees are non-refundable and are not a tax; rather, they are used for the responsible collection, transportation, and recycling/disposal of the product/material. For example, in BC when you buy a TV, you are charged an EHF between $6.00-$25.00 depending on the size of the TV.

Some regulations have requirements on how fees can be used, including whether they are visible to the customer or not. This is the case in Quebec, New Brunswick and for some Ontario programs. In cases where a regulation does not speak to visible fees, companies can decide whether to charge customers an eco-fee/EHF or absorb the cost. When deciding on your company’s approach it is important to consider the various benefits and drawbacks.