EPR: Ontario versus British Columbia

There’s broad consensus that Ontario’s Waste Diversion Act (WDA) is fundamentally flawed and in need of wholesale reform. The question is not whether but how it should be reformed. With any change, policymakers and stakeholders look to what other jurisdictions may have to offer.

Enter British Columbia, which has quietly added two new product categories to its Recycling Regulation every three years and touts itself as a world leader in extended producer responsibility (EPR). EPR Canada, a not-for-profit group that monitors the EPR performance of Canadian jurisdictions, ranked BC above all other provinces in 2012 in terms of EPR policy.

Despite its reported success, is BC’s EPR policy really the panacea that Ontario should be looking to?

On close inspection, the BC model comes loaded with many of the same problems as Ontario. It’s surprising that this has not attracted more attention. Consumers, municipalities and service providers face very similar issues; the difference for BC stewards is that they have less oversight than Ontario, despite how toothless Waste Diversion Ontario is perceived to be.

BC’s EPR model for products and packaging is not based on individual producer responsibility; rather, under BC’s Recycling Regulation, once a producer “… appoints an agency to carry out duties of the producer,” the stewardship agency (not the producer) becomes the regulated party.

The transfer of this legal liability from producers to stewardship agencies is accompanied by the development of a common system of stewardship fees (“eco-fees”) levied on products supplied by producers into the BC market (to cover stewardship program costs).

Mirroring Ontario, all programs are run by single collective stewardship agencies. Just like Ontario, the stewardship agency model allows producers to transfer their legal liability to a third party while affording that agency with what is essentially the power of private taxation.

Like Ontario, fixed eco-fees are widespread in BC. Over the past five years, British Columbians have paid almost $500-million in eco-fees on various products that do nothing to drive innovation, efficiencies or recycling.

Without incorporating recycling costs directly into the price of products, stewards are neither motivated nor encouraged to find innovative ways to reduce both waste and costs. Costs are simply passed directly on to consumers rather being borne by producers in their profit margins. They are therefore not scrutinized, but treated as a tax.

BC stewardship agencies have gone to great lengths to preserve and defend eco-fees, having engaged Consumer Protection BC (established under the Business Practices and Consumer Protection Authority Act) to explain and promote eco-fees to consumers.

BC stewardship agencies exert absolute market power over the recycling sector and municipalities, just like Ontario. BC stewardship agencies, not the government, set environmental standards, and implement and enforce those standards however they see fit.

For materials such as electronics and small appliances, the approach of allocating material quotas to recyclers undermines (rather than enhances) fair, open and competitive recycling markets.

Enforcement and oversight of EPR programs by the government in BC is minimal, with no systematic effort to determine what environmental outcomes are being achieved. Recently, to address this shortcoming, the BC Ministry of Environment tabled a new requirement for stewardship agencies to complete non-financial audits to track the disposition of materials collected, reused and recycled.

In BC, just as in Ontario, if agencies fail to meet environmental targets, producers are not subject to penalties. As a proposed Band-Aid, the BC environment ministry is suggesting stewardship agencies pay municipalities for the waste management costs associated with the uncollected portion of material necessary to meet the agencies’ recycling targets.

Simply adopting BC’s EPR model will not serve the interests of Ontario consumers, municipalities or the recycling sector, as the model is already so similar.

However, with the introduction of the Waste Reduction Act, Ontario rightly chose to adopt a clean-slate approach to EPR that’s economically efficient. Individual producers (not collective stewardship agencies) are held responsible for meeting environmental outcomes for the end-of-life management of their products or packaging. Collective action is allowed but does not sanction collectives. The proposed legislation preserve and protect fair, open, and competitive producer and recycler markets to drive efficiencies for both stewards and service providers. It restricts the collusive setting and coordinated passage of point-of-sale eco-fees to consumers and observes Canadian competition laws in regard to such eco-fee “price-fixing.”

The government sets enforceable environmental standards (proces-sing, transportation, collection), service standards (accessibility), administrative penalties, and targets (reduction, reuse, recycling and/or recovery).

Ontario’s Waste Reduction Act is precedent setting and reframes waste diversion in a manner true to the fundamental precepts of EPR: it harnesses competitive markets to protect the environment. It’s now up to the political parties in Ontario to move this important piece of legislation forward, and time (ironically) for BC to catch up.

Rob Cook is CEO of the Ontario Waste Management Association (OWMA) in Brampton, Ontario. Contact Rob at rcook@owma.org