When Waste Diversion Ontario (WDO) released its consultation paper, Blue Box Program Plan, in 2003 it garnered a fair bit of positive press. As noted in earlier columns in this magazine regarding the details of the plan (see Regulation Roundup in April/May and June/July 2003 editions), provision for the continuation of the blue box program had received significant analysis and was the subject of lengthy planning.
The WDO designated a new entity — Stewardship Ontario — as the Industry Funding Organization (IFO) for blue box waste. The plan is for the net recycling costs of the blue box to be funded 50 per cent by Ontario municipalities and 50 per cent by designated industry stewards. Designated stewards will be defined as brand owners or “first importers” of products that are the source of blue box waste.
Blue box gets green light
In December 2003 the provincial government approved the Blue Box Program Plan that’s anticipated to initially result in $3 million per month flowing from industry to municipalities. This will cover half of the estimated $72 million net cost of curbside recycling in Ontario.
News about the funding was accompanied by another announcement: a crucial $5 million from the Liquor Control Board of Ontario (as part of an annual 5-year commitment) to support WDO payments to municipalities and for its own administrative costs.
The fact is that WDO was running on fumes for the last half of 2003. There were serious concerns that a game of brinkmanship was occurring between the WDO and former Premier Eves’ government with respect to funding issues that could have resulted in the WDO shutting down its operations early in 2004. Fortunately for the WDO and proponents of its various activities, Dalton McGuinty’s newly-minted Environment Minister Leona Dombrowsky arrived with the cavalry shortly before Christmas with a commitment for the funds necessary to keep the WDO in business.
It appears that the relationship between the WDO and the current provincial government will be a great improvement over the one that existed under the conservatives. Blue box funding and other WDO initiatives appear to be secure for the time being.
Many people have hailed the announcement as a victory for the environment, including some municipalities weary of going it alone until now. But there are undercurrents of discontent and, in certain cases, open criticism of the Blue Box Program Plan and even the WDO (more generally).
First of all, the actual cost of curbside recycling across Ontario may end up being significantly higher than the current estimated $72 million price tag. In an article in The National Post in January, Michael Legault, editor of trade magazine Canadian Plastics, estimated the real cost of blue box programs as closer to $100 million. Legault quoted a packaging association insider who is in frequent contact with the government who predicts 25 per cent or more increase in this cost. With blue box programs set to expand to include other materials, the cost of curbside recycling will likely go up.
This could be a manageable situation except that net recycling costs have reached high levels already. Costs are estimated as high as $135 per tonne. If this is correct, future cost increases will only widen the gap between recycling and its primary competitor: landfilling.
Critics say the plan has the paradoxical effect of encouraging manufacturers and importers to use disposable non-recyclable packaging in order to avoid having to contribute to the cost of the blue box system. By switching to other materials packaging companies could reduce their exposure to WDO fees in order to enhance their competitiveness. As a result, the amount of recyclable material might not increase as quickly as the province would like and the amounts moving into the disposal stream could continue to increase. While many of the members of the waste disposal will not have any trouble with that situation, it flies in the face of provincial and municipal policies to divert higher amounts of waste from landfill. Other criticisms include that none of this encourages people to change their consumptive habits and reduce packaging. A few big brand owners and importers pay while others get a free ride.
With the advent of provincial funding shortly before Christmas, the Blue Box Program Plan appears safe for the time being. Industry’s paying half the net bill for the blue box will likely insulate the program from cuts related to provincial budget deficits for the time being. However, should market forces create the kinds of difficulties that critics of the plan foresee, the proponents of a deposit-return system for beverage containers and other materials (such as exist in many other Canadian provinces) may emerge from the wings.
Adam Chamberlain, LL.B. is with Power Budd, the Canadian affiliate of Cameron McKenna, an international law and consulting firm. Adam sits on the board of directors of the Ontario Waste Management Association. E-mail Adam at email@example.com