August 2016
Backgrounder

There is big news for the Ontario Blue Box program! The provincial government recently moved toward full-producer responsibility for the Blue Box Program, outlined in Bill 151, The Waste Free Ontario Act, 2016. The Bill received Royal Assent on June 9, 2016, and Proclamation is expected as early as fall 2016.

Prior to Bill 151, stewards – more commonly known as producers – were responsible for paying 50% of the annual share of the costs for printed paper and packaging as per the agreement under the Waste Diversion Act, 2002 (WDA). However, from 2004-2014, producers have consistently paid less than their 50% share, forcing municipalities to cover a $233 million shortfall on top of their share. Without significant change to the legislation, municipalities were concerned that this trend would continue.

The Ministry of the Environment and Climate Change has posted regulations outlining how existing diversion programs – Blue Box, Municipal Hazardous and Special Waste, Electronics and Tires – will be transferred from the WDA to the Waste Diversion Transition Act (WDTA) during the transition to the new full-producer responsibility regime.

While there is no formal time period for this transition to take place, the City of Toronto, Regional Public Works Commissioners of Ontario, and the Municipal Waste Association have worked with AMO to stress the need for municipalities to have a say when this transition begins. We have urged the Province to include the following as key principles in the WDTA-related policy statements and regulations:
  • Establish reduction and reuse targets and high recycling targets to reduce use of precious natural resources;
  • Incorporate geographic coverage standards for programs that build on current levels of service, to ensure all Ontarians are serviced under the new programs;
  • Protect service levels for residents and businesses in Ontario i.e. where curbside collection is currently provided, it will continue;
  • Provide full and fair compensation for any municipality that deliver services to customers on behalf of producers.
We expect discussions on transitioning the Blue Box program to start with the Province and producers once the Bill is proclaimed.

About Municipal Waste Diversion
Ontario municipalities operate one of the most advanced integrated waste management systems, and together manage waste for more than five million households. Current data shows that municipalities collect, process, market and dispose of nearly 4.4 million tonnes of material each year, at an annual cost of $1 billion to taxpayers.

In Ontario, five waste diversion programs are delivered jointly by municipalities and producers that in 2015 alone, diverted:
  • 1,030,540 tonnes of residential organic waste*
  • 850,000 tonnes of printed paper and packaging (Blue Box)*
  • 122,025 tonnes of tires**
  • 67,115 tonnes of electronic waste**
  • 24,385 tonnes of municipal hazardous or special waste**
* Municipal channels only
** Municipal and other channels


Current Steward Obligation for Blue Box Program Funding
Each year the “Steward Obligation,” which determines how much funding municipalities will receive for Blue Box services from brand owners and producers of designated printed paper and packaging has to be calculated.

WDO created the Municipal Industry Program Committee (MIPC) to determine this annual obligation. It is comprised of AMO and the City of Toronto, which representing municipalities, and Stewardship Ontario, which represents producers of goods and packaging.

Over the last several years, MIPC has not been able agree on funding. Stewardship Ontario has pressed for a financial model that would provide municipalities with less than 50% of their actual costs. AMO and the City of Toronto have argued that municipalities must be reimbursed based on their actual costs, which is collected by WDO through their annual Datacall.

In 2014, the parties went to binding arbitration before Justice Robert Armstrong, who set the obligation based on actual municipal costs for delivering Blue Box programs. Since then, there has been continued disagreement every year, with the WDO unable to establish a consensus on funding. The WDO used the Arbitrator’s methodology for 2016, but then relied on a different model to calculate the funding obligation for 2016.

AMO is continuing to work with WDO to press for a funding model that fairly compensates municipalities for Blue Box costs, while satisfying stewards’ need for cost containment.