Canadian Plastics

Recycling Plan Will Force Companies Out of Ontario

As the McGuinty government recently made clear, it's full speed ahead for Ontario's utopian plan to largely phase out the entity once commonly known as trash. As with all utopian plans, this strategy ...

February 1, 2004   By Michael LeGault, editor



As the McGuinty government recently made clear, it’s full speed ahead for Ontario’s utopian plan to largely phase out the entity once commonly known as trash. As with all utopian plans, this strategy (orchestrated mostly without public input by non-elected officials) will require, a) lots of money, and b) social and economic engineering of a scale that will create careers for a small legion of regulators and activists.

The Plan will have brand owners (say, Kraft Foods) and first importers of record (e.g. fresh food importer Longos), now known as “stewards”, pay for 50% of the province’s net recycling costs. In its haste to get The Plan and fee collection rolling, the government neglected to change the draft version’s obligation dates, which are almost a year old. Nevertheless, it’s forward ho, with up to 25,000 companies now going through a registration process with Stewardship Ontario, the funding organization empowered to assess and collect the fees.

The government’s haste is understandable. In the past 12 months, the estimated costs of Blue Box program have jumped over 30%, to $84 million from $62.5 million. These are doctored figures, used to sell the program. The real cost is closer to $100 million; this, according to a Packaging Association of Canada spokesman in frequent contact with the government, is predicted to rise by at least 25% in 2004. The government’s plan to expand the recovery of materials from curbside recycling from its current 45% to 60% by 2008 will add further costs.

Ontario companies will begin to get invoices for their recycling levies as early as this spring. No one knows how much these fees will be, as no one really understands the formula for calculating them. A clause in The Plan permits companies to ask suppliers to voluntarily pay part, or all, of the recycling levy. This means Coca Cola could ask the manufacturer of its bottles to pony up cash to pay its recycling fee. The fees could be disastrous for hundreds of Canadian packaging manufacturers and suppliers who subsist on tiny margins and whose main competitors, in the U.S., do not have such costs. Already hit hard by the rising dollar this year, some companies have told the government they are considering moving their plants out of Ontario to stay in business.

Companies, like people, shun pain. Charging businesses for the amounts of their products and packaging being recycled does not provide incentive to promote recycling. Even environmentalists acknowledge that the system is regressive. Writing in the Gallon Environment Newsletter, former Pollution Probe director Colin Issacs observes, “The garbage disposal mess…will only worsen with a program that encourages brand owners to shift their products out of recyclable packaging and into disposable packaging.”

There is still wiggle room for the exercise of common sense, which is not incompatible with sound environmental practices or saving face. The recovery rate on the ubiquitous beverage container is much better (as high as 80%) in provinces and states with a deposit law. There is nothing in the legislation that inherently hinders deposit-return legislation. Recycling of all other materials, such as paper, metal and plastic, should be privatized. Recycling companies should be granted generous tax credits for the social/environmental aspect of their services. Market-driven recycling will cost less and provide higher quality feed stocks to industry, which will drive the price of recycled materials up, and encourage more recycling.

e-mail: mlegault@canplastics.com


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