04/22/2014

A Backgrounder April 2014

Ontarians recycle about 47 per cent of their total residential waste, 19 per cent 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 efficiently and effectively serving local communities and protecting 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. The two sides are now going into arbitration to determine the steward obligation to municipalities for 2014.

Who

  • The Association of Municipalities of Ontario (AMO) and the City of Toronto are entering into arbitration with Stewardship Ontario (SO) with respect to a dispute over funding for the 2012 Blue Box recycling program. 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 is an industry group that represents companies that make or import paper, products and other materials that go into Blue Box recycling bins. While the majority of stewards are small and medium businesses, SO membership is mostly steered by the large consumer products manufacturers and retail corporations, many of them Fortune 500 companies.
How does Blue Box funding work
  • The Waste Diversion Act, 2002 requires Stewardship Ontario to pay half the net cost of the Blue Box program. Property taxpayers and residential users have to pay for the other half.
  • Stewardship Ontario, representing the product stewards and importers, has always paid closer to 46 per cent of the cost, placing a greater burden on taxpayers.
  • The cost of recycling has grown considerably over the years. In part, because companies continue to adopt materials that are costly and more difficult to recycle.
Why arbitration
  • Waste Diversion Ontario (WDO), the government’s recycling watchdog, has confirmed municipal net costs were $228 million in 2012. Based on these costs, Stewardship Ontario’s 50 per cent obligation is $114 million.
  • Stewardship Ontario wants to pay less, based on its own theoretical financial model of how much the Blue Box recycling program should cost. They argue that municipalities should be more efficient and that the industry group should pay less.
  • Ontario municipalities invented, grew and sustained the first Blue Box system in the world. Given that municipalities pay half the cost, they continually strive to improve the efficiency and effectiveness of the program, offering convenient service to the public while protecting the environment.
  • The Blue Box program requires municipalities to invest in continuous improvement and to improve efficiency and they have been doing that. Costs continue to rise because a lot of materials used today in products and packaging are harder and more costly to recycle.