08/27/2008

This discussion paper examines various options associated with a change in the financial responsibility of the Blue Box Program and outlines the impacts on municipalities with each option.

Executive Summary:
 
There is a growing need to revise the current Blue Box funding model as municipalities are becoming more vulnerable to the rising waste management costs. The combined effect of managing more Post Consumer Packaging and Printed Paper that is difficult to recycle, and the anticipated designation of other diversion programs, such as kitchen organics and leaf and yard wastes, leaves municipalities burdened with costs that could otherwise be avoided.

In this paper, municipalities have identified an opportunity to align the current Blue Box model with other recent material designations under the Act, where end-of-life responsibility is fully borne by the industry that produces the product. Shifting the financial responsibility of managing Post Consumer Packaging and Printed Paper material from the property tax-payers, who currently subsidize an industry created problem, to a model where the industry has full financial responsibility, could produce a beneficial outcome for all parties involved. 

The Association of Municipalities of Ontario (AMO) and the Association of Municipal Recycling Coordinators (AMRC) are addressing this issue with the understanding that the Province was interested in hearing more about the concept of a “functional split” or division of responsibilities associated with the Blue Box Program. The idea of a “functional split” for a diversion program is not something new to municipalities, industry or the Province, as all three parties used this model to allocate costs and responsibilities in the first phase of the Municipal Hazardous and Special Waste (MHSW) program. This is about to change as the Minister of the Environment has recently given direction that management of MHSW is to be fully borne by the stewards of this material. 

While this idea was perceived at having merit during the development of the first phase of the MHSW program, it does not have merit with the Blue Box. Municipalities have determined that any changes in responsibility and revenue sharing could not be done in a way that would improve the Blue Box system from its current state. Nothing short of industry assuming 100% of the costs to manage all postconsumer packaging and printed paper would address the fiscal imbalance in the current Blue Box model and be consistent with the other diversion programs which were recently approved.

This discussion paper examines various options associated with a change in the financial responsibility of the Blue Box Program and outlines the impacts on municipalities with each option.