11/27/2014

Ontarians recycle about 47 per cent of their total residential waste, 39 per cent of which is through their Blue Box.
This important program keeps waste like paper, plastic, and packaging out of landfill.  Ontario’s municipalities have been running Blue Box programs since the 1980s, with the goal of offering convenient and efficient local services to protect the environment.

Since the inception of the Blue Box, businesses that manufacture and/or sell the products that end up in recycling bins – the stewards – have been critical partners.  Since 2003, they have been required by law to pay for half the cost of the Blue Box program.  However, they have seldom met this obligation.

Arbitration decision

  • In May 2014, municipal and steward representatives went into arbitration to determine the steward payment for 2014 after a negotiated agreement could not be achieved.
  • Municipalities argued that the stewards should pay 50 per cent of their net costs, based on data confirmed by Waste Diversion Ontario (WDO), the government’s recycling watchdog.
  • Stewardship Ontario argued that it should pay less, based on its theoretical financial model of how much the Blue Box recycling program should cost.  They said that municipalities should be more efficient and that the industry group should pay less.
  • On November 25, 2014, the arbitrator confirmed that the 2014 steward obligation should be based on the municipally reported Datacall which is verified by WDO, awarding $115.2 million to municipalities.  Municipalities already received interim payments for 2014 calculated on an interim steward obligation of $99.5 million, meaning that an additional $15.6 million is to be paid to communities operating Blue Box programs.
  • The arbitration took place over five months and over 30 hearing days.  More than 24 witnesses were called and about 700 documents were produced.  
Who
  • The Association of Municipalities and the City of Toronto represented the municipal sector in the arbitration.  Between them, AMO and the City of Toronto represent over 90 per cent of Ontario’s Blue Box programs and 99 per cent of the municipal residents served by these programs.  AMO represents 211 Blue Box programs, serving more than 400 municipalities.
  • Stewardship Ontario (SO) is the industry-funded group under the legislation that represents producers and other stewards that make or import paper, products, and other materials that go into Blue Box recycling bins.
How Blue Box funding works
  • The Waste Diversion Act, 2002 requires Stewardship Ontario, as representatives of the product stewards and importers, to pay half the net cost of the Blue Box program.  Property taxpayers and residential users pay for the other half.
  • Historically Stewardship Ontario has always paid closer to 46 per cent of the cost, placing a greater burden on taxpayers.  Given that municipalities pay at least half the cost, they continually strive to improve the efficiency and effectiveness of the program.
  • The cost of recycling has grown considerably over the years.  In part, because the types of products and packaging used today involve more lightweight and complex materials that are more costly and harder to recycle.
  • The Blue Box program requires municipal governments to invest in continuous improvement and to improve efficiency and they have been doing that.
  • Ontario municipalities invented, expanded and sustained the first Blue Box system in the world.  By offering convenient services, municipalities and their residents have been diverting increasing amounts of waste from landfill.