AMO Policy Update – July 15, 2010 Disposal Fees

Straight Talk on Eco Fees

Recently, many consumers have been questioning new “eco fees” that are appearing on their bill when they purchase certain hazardous household products. The media has been abuzz with fears of an unpublicized new tax.

The reality, however, is quite different. The media furor began because on July 1st, 13 new material categories were added to the list governing waste diversion regulations. The list includes many more products that people use every day. This fact, combined with the use of terms such as “eco tax” and “eco fee” by some retailers, resulted in public confusion and an outcry from critics.

So let’s set the record straight.

First a little background. Stewardship Ontario is a non-profit organization funded by industry and created by the Waste Diversion Act, 2002, in order to set up waste diversion programs in the province.

The goal of these waste diversion programs is to ensure that producers are held responsible for managing disposal of their products once they’ve reached the end of their natural life – known as extended producer responsibility.

Since 2008, Stewardship Ontario has been responsible for managing nine types of materials classified as hazardous or special waste. These include household paints, solvents, such as thinners for paint, used oil filters and empty oil containers and single-use batteries. On July 1st, 13 new product categories were added, such as pharmaceutical products, aerosols, and fluorescent bulbs.

Stewardship Ontario charges industry the fees for what it costs to recover, recycle or safely dispose of these hazardous products. They are not involved, in anyway, in the setting or collection of eco fees.  Rather, they collect fees from manufacturers based on the amount of product they manufacture and sell in a year. For example, they collect 12-cents for every 1,000 prescription pills manufactured and 23-cents per litre of insect repellent. The full schedule of fees can be found on their web site.

The legislation governing the program does not require an “eco fee” for consumers. Manufacturers and retailers have in some cases chosen to pass the cost of doing business on to consumers and identified the cost as a separate “eco fee”. Therefore, there is no standard fee – in reality the program should not add more than 10 cents to the cost of a hazardous product.

Up until the Waste Diversion Act, property taxpayers foot the bill for disposal and diversion of waste, including the high costs of safely disposing of hazardous materials.. Many municipalities will continue to provide the service to their residents and are negotiating contracts with Stewardship Ontario to do so.

According to the Ministry of the Environment, the program currently diverts over 20,000 tonnes of hazardous waste annually from Ontario landfills. That is expected to increase to over 54,000 tonnes with the new product categories that came into effect on July 1st.

The benefits of these programs are two-fold. First, it rightly puts pressure on industry to reduce the waste and environmental impact of their products by holding them responsible for the full lifecycle of what they produce. Secondly, it reduces the burden on property taxpayers for these costs.

Unfortunately, many in industry have chosen to misrepresent the facts and have told consumers that the eco fee is a government-mandated tax – but in reality, the eco fee is charged at the discretion of manufacturers and retailers and the funds go to an industry organization, not to government.

Concerns about consumer costs are penny wise and pound foolish when you consider the cost of cleaning up polluted land and water.  Look no further than the Gulf of Mexico’s oil spill to put that math together.

The government has listened to not only municipal governments, but others, including business and environmental leaders, as we collectively look to be environmental stewards in action. Shining a bright light on these costs and shifting them away from property taxpayers is the only practical way to promote greater producer responsibility and greener consumer choices.

AMO Contact:   Milena Avramovic, Senior Policy Advisor, email: MAvramovic@amo.on.ca, (416) 971-9856 ext. 342