Transcript Click to add title - Stewardship Ontario

Slide 1
Blue Box Program Plan Review for 2007
Stewardship Ontario Funding Formula
- First Public Consultation Meeting December 8, 2005
Slide 2
Introduction to Session &
Website Mechanics
Lyle Clarke & Neil Antymis
Slide 3
Welcome!
 First public consultation meeting on Blue
Box Program Plan (BBPP) review for 2007
& Stewardship Ontario’s funding formula
for stewards
 More than 135 people here in person
 Approximately 40 registered by webcast

reflects interest & participation of diverse
stakeholders
Slide 4
1st Half of the Morning
 Introduction, Dennis Darby
 Background & Objectives of Consultation, Lyle
Clarke & Neil Antymis
 Context for the Review, Keith West
 Review of Current Funding Formula, Guy Perry
 Long List of Options, Derek Stephenson
 Dis-aggregation/Differentiation of Material Fees,
Catherine McVitty
 Break
Slide 5
2nd Half of the Morning
 Recycled Content, John Mullinder
 Promoting 3Rs Through the Blue Box
Program Plan Funding Formula, Jo-Anne
St. Godard
 Raising de minimis Level, Judith Andrew
 Lowering de minimis Level, Kim McKinnon
 Lunch, ~1:00 p.m.
Slide 6
Afternoon
 Factor Weightings, Guy Perry
 Other Suggestions Within Scope of Review,
Derek Stephenson/Guy Perry

(e.g., Printed Paper Aggregation, Revenue,
Biodegradability, etc.)
 Options Out of Scope of Review, Derek
Stephenson
 Additional Suggestions From Participants
 Next Steps
 Adjourn
Slide 7
Our Audiences
 Webcast audience listening on-line


speakers will refer to slide numbers to prompt
you to move to the next slide
email questions/comments to:
[email protected]
 Archived webcast available for 180 days
Slide 8
Introduction
Dennis Darby
Slide 9
Making Progress
 Board looks forward to reviewing
suggestions
 Board Steering Committee overseeing
review process

effective, open & transparent
 Successful implementation of Blue Box
Program Plan
 Whether/how improvements to funding
formula can be made
Slide 10
1. 1800 Stewards Registered & Reported
 Represents 1.3M tonnes of Blue
Box wastes
Slide 11
2. First Charges Laid
 Some companies failed to report on time
 Action taken under Waste Diversion Act
(2002)

may result in others coming into compliance
Slide 12
3. Target Revenues Met This Year
 Shortfall in first two program years

less than 2% of annual budget targets
 2005 revenue target will be met

target $62.5M
Slide 13
4. Municipal Obligations Met
 Municipalities paid in full & on time
 $81M paid in total by end of 2005
program year (March 2006)
Slide 14
5. Cost Containment Plan Approved
 Difficult challenge successfully met
 Developed in partnership with Association
of Municipalities of Ontario (AMO) & City
of Toronto

special thanks for municipal effort &
cooperation
Slide 15
6. Effectiveness & Efficiency
(E&E) Fund Progress
 Also implemented in partnership with
municipalities
 Total of 34 projects & $5.2M approved to
date
 By end of 2006, number expected to rise
to about 60 projects & $11M
 New tools & techniques

great potential for increases in cost-effective
diversion
Slide 16
7. First Market Development
Support Project Launched
 Successful launch with positive results
anticipated
 Initial focus on glass

strengthen demand & lower recycling costs
 $2.5M in financing
Slide 17
8. Financial Assistance Provided to WDO
 Supported development of Waste
Diversion Ontario (WDO)
 Funds loaned awaiting approval of
additional Industry Funding Organizations
(IFOs)
Slide 18
9. Governance Structure Revised
 Recent approval by Minister
 Board to expand from 7 to 15 members

includes major sectors of obligated industries
 Will be supported by two new committees

ensures policy & technical advice from wide
range of stakeholders
Slide 19
10. Four Fee Setting Cycles Completed
 Blue Box Program Plan successfully
implemented & funded
 Challenge today is to see if we can make it
better

more effective

easier to administer

fairer to industry sectors
Slide 20
Other Provinces Watching Our Successes
 In particular: Québec, Manitoba,
Saskatchewan
 “Need to get it right…

need to harmonize approach to
stewardship across the country”
Slide 21
Background & Objective
of Consultation
Lyle Clarke & Neil Antymis
Slide 22
Introduction
 Background to review



annual review of rules
4 rounds of fees
suggestions for changes
 Spirit of review

open, comprehensive, fair & transparent
 Broad timing




submitted to WDO by mid March 2006
post on Environmental Registry by mid April 2006
(target)
approval by Minister by end of June 2006 (target)
in time for setting fees for 2007
Slide 23
Objectives of Review
Provide an opportunity for all stakeholders to:
 re-evaluate the current funding formula
 identify & assess potential modifications or
alternative approaches
In support of:
 the goals of the Blue Box Program Plan (BBPP)
 the policy objectives & legal requirements of the
Waste Diversion Act (WDA)
Slide 24
Steering Committee
 Ensure key stakeholder concerns &
suggestions are heard
 Accurately reflect these to the Stewardship
Ontario Board
 Make recommendations to the
Stewardship Ontario Board
Slide 25
Advisory Committee Formation
 Initial interim step toward technical & policy
advisory committees

part of approved new governance structure
 Broad representation – participants invited from:

major contributors
 largest obligation
 not currently represented on Board

knowledgeable about plan

range of opinions

non-steward key stakeholders, e.g. NGO’s,
municipalities
Slide 26
Advisory Committee
 Identify options for consideration
 Identify key issues of concern to their
constituency
 Encourage their participation in the
consultation program
 1st meeting held October 27 to identify &
review long list of options
Slide 27
Stewardship Ontario Board
 Approve the list of options to be
considered in the consultation program
 Review the work & recommendations of
the Steering Committee
 Make recommendations to the WDO
Board
Slide 28
Proposed Timeline & Workplan
1st Public Meeting
Dec 8
Receive & Review Comments
- Detail for modeling impacts
Dec 22
- Further general comments
Jan 12
SC Recommendations
Jan 20
2nd advisory committee meeting
Jan 25
Stewardship Ontario Board for approval of preferred option
2nd public meeting
Feb 1 or 2
Feb 15
-Recommendations on FF & related changes to BBPP
3rd advisory committee meeting
Mar 7
-Preferred option & related impacts to BBPP
Stewardship Ontario Board Approval
Mar 9
WDO Board Approval
Mar 22
Target for posting on Environmental Registry
Mid Apr
Target for Minister approval
End June
Slide 29
December 8 Meeting Objectives
1. The review of suggested modifications &
alternatives to the current funding formula
 identified within discussion paper # 1
2. Identification of additional suggestions within
scope of review
3. Solicit information required to evaluate
suggestions
 in support of policy objectives & legal requirements
of WDA
Slide 30
Principles Guiding Review (1)
Funding formula must:
 meet legal requirements of WDA
 treat stewards & material categories in fair
& equitable way
Slide 31
Principles Guiding Review (2)
Desirable that funding formula also:
 provide incentives to encourage diversion by

reduction

reuse

recycling
 be transparent
 be simple to administer
 facilitate compliance & auditing requirements
Slide 32
Blue Box Program Plan Review:
Program and Fee Development Under
the Waste Diversion Act, 2002
Presentation by Keith West,
Ministry Representative on WDO Board of Directors
Director of Central Region Office, Ministry of the
Environment
Slide 33
Waste Diversion Act 2002 and
Diversion Programs
•
Under the WDA, 2002, the purpose of a WDO diversion program must
promote reduction, reuse and recycling (3Rs) and must be financed by
industry steward fees, not taxes.
•
Under subsection30 (1) of the WDA, a designated industry funding
organization for a waste diversion program may make rules setting the
amount of fees to be paid by stewards or prescribing methods for
determining the amount of the fees.
•
Subsection 30 (3) of the Act requires that the fees paid by Stewards not
exceed the sum of:
•
The costs of developing, implementing and operating the program
•
A reasonable share of costs incurred by the WDO under the Act (not
covered by 1 ).
•
A reasonable share of costs incurred by the Ministry in
administering the Act.
•
Subsection 30 (3) of the Act also requires that the fee paid by a steward
“should reflect the proportion [of these total costs] attributable to the
steward.
33
Slide 34
Waste Diversion Act 2002 and
Diversion Programs



Steward fees are not taxes because they impose
the costs of the program on the stewards in
relation to the costs caused by the stewards
(nexus) and/or to achieve program objectives
(3Rs);
In addition, the fees are paid to the Industry
Funding Organization, not to the Crown and are
not revenue for general purposes.
A properly designed WDO program has the
flexibility between the nexus and introducing other
factors to achieve a particular policy objective.
34
Slide 35
Blue Box Program Plan
•
•
•
On December 22, 2003 the Minister approved the Blue Box
Program Plan (BBPP) requiring industry stewards to pay fees
covering 50% of net municipal blue box program costs.
The BBPP has successfully sustained the municipal blue box
system:
–
Diversion continues to increase
–
Cost containment measures implemented
–
Money towards improved system efficiencies – E&E fund
–
Develop markets – coloured glass market research
–
Stakeholders working together – MIPC
Opportunity for continuous improvement from lessons learned.
35
Slide 36
Review of Current
Funding Formula
Guy Perry
Slide 37
Industry Obligation
 Defined by industry share of the net cost of the
residential Blue Box system
 50% of the cost approved by the WDO
$31.25M
$42M
2003
2004
$58.75M
$55.5M
2005
2006
Slide 38
Allocation to Each Material
 Total industry contribution is allocated to each
material using the steward funding formula
 Results in fee rates for each material

change annually depending on costs & recovery
for each material
33.25%
35.65%
35.57%
11.77%
37.94%
10.27%
5.28%
11.96%
1%
38.16%
16.7%
38.09%
15.16%
37.82%
5.2%
5.84%
6.2%
2002
2003
Printed
Paper
Paper
Packaging
2004
Plastics
Aluminum
7.49%
41.08%
2005
Steel
Glass
5.58%
Slide 39
Waste Diversion Act (WDA)
 A primary consideration of the funding
formula is the section of the WDA
referring to:
Fees paid by a steward should fairly
reflect the costs of developing,
implementing & operating the Blue
Box program that is attributable to
the steward
i.e., the cost of managing the Blue Box
materials it generates
Slide 40
Cost of Managing Each Material
30
Cost to manage ($ Millions)
25
20
15
10
5
0
-5
Newsprint CNA/OCNA
All Other
Printed
Paper
Paper
Based
Packaging
Plastics
Packaging
Steel
Packaging
Aluminum
Packaging
Glass
Packaging
 Chart shows fees that reflect the cost to manage each material
 Cost to manage each material determined by detailed activity
based costing studies
Slide 41
Objectives of Blue Box Program
 To meet the intent of the WDA to promote
reduction, reuse & recycling
 To discharge the legal obligation of
stewards under the WDA
 To increase the recycling of Blue Box
waste

Minister subsequently requested policies &
practices to reach 60% diversion
Slide 42
Current Funding Formula
30
25
Based only on
Cost to Manage
Fees ($ Millions)
20
Current Base Fees after
Funding Formula
15
10
5
0
-5
Newsprint CNA/OCNA
75%
All Other
Printed
Paper
Paper
Based
Packaging
63%
51%
Plastics
Packaging
Steel
Packaging
Aluminum
Packaging
Glass
Packaging
18%
47%
40%
63%
Recovery Rate (%)


3-factor formula transfers portion of obligation from
materials with higher recovery rates to materials with
lower recovery rates
Designed to reward materials that are contributing
to the achievement of the objectives of the plan
Slide 43
Three-Factor Formula
1. Net Cost

40% of obligation allocated by share of net cost
2. Recovery Rate

40% of obligation allocated by relative recovery rate
(% recovery)
3. Equalization

20% of obligation allocated by incremental cost to
reach 75% all materials
 Weightings (40:40:20) designed to
balance objectives of BBPP & goals &
intent of the WDA
Slide 44
30
Administration & Program Delivery
Current Funding Formula
With Common Costs
25
Fees ($ Millions)
20
15
Current Funding Formula
Without Common Costs
10
5
(5)
Newsprint CNA/OCNA
All Other
Printed
Paper
Paper
Based
Packaging
 Other program costs




market development fees
direct program delivery
WDO & Stewardship Ontario
administration
recovery of shortfall (<2% of
program cost)
Plastics
Packaging
Steel
Packaging
Aluminum
Packaging
Glass
Packaging
 Allocated according to
combination of


number of stewards reporting
each material
quantities reported
Slide 45
Aggregation of Fees (1)
500
For Illustration
Plastic Packaging
Fees ($/tonne)
400
300
Fees reflecting cost only
200
100
0
PET bottles
55.9%
HDPE bottles
Plastic Film
Plastic
Laminants
52.0%
7.7%
1.0%
Polystyrene Other Plastics
1.8%
Recovery Rate (%)
Fees for paper, plastic and steel packaging aggregated
8.2%
Slide 46
Aggregation of Fees (2)
500
For Illustration
Plastic Packaging
Disaggregated Fee Rates
Fees ($/tonne)
400
300
Fees reflecting cost only
200
100
0
PET bottles
55.9%
HDPE bottles
Plastic Film
Plastic
Laminants
52.0%
7.7%
1.0%
Polystyrene Other Plastics
1.8%
Recovery Rate (%)
Fees for paper, plastic and steel packaging aggregated
8.2%
Slide 47
Aggregation of Fees (3)
500
For Illustration
Plastic Packaging
Disaggregated Fee Rates
Fees ($/tonne)
400
300
Fees reflecting cost only
Aggregated
Fee Rates
200
100
0
PET bottles
55.9%
HDPE bottles
Plastic Film
Plastic
Laminants
52.0%
7.7%
1.0%
Polystyrene Other Plastics
1.8%
Recovery Rate (%)
Fees for paper, plastic and steel packaging aggregated
8.2%
Slide 48
Distribution of 2005 Fees
By Material
Steel
5%
Plastics
39%
Aluminum
0%
Glass
12%
Paper Based
Packaging
34%
Printed Paper
10%
Slide 49
Distribution of 2005 Fees
By Sector
Durable
Products
8%
Retailers &
Distributors
35%
Consumable
Products
44%
Printed
Media
1%
Other Services
4%
Other
8%
Slide 50
Long List of Options
Derek Stephenson
Slide 51
Purpose of Consultation
 Process to date



compiled suggestions received during start-up years
Advisory Committee meeting to identify additional
suggestions & review the long list of ideas
suggestions summarized & distributed in discussion
paper
 Today’s consultation meeting



describe ideas within scope of review
describe ideas outside of scope of review
identify additional ideas
Slide 52
Ideas Within Scope of Review
 Modifications to current funding formula

adjust factor weightings

adjust allocation of common program costs

further aggregation of the printed paper category

dis-aggregation of plastic & paper packaging fees

revisit de minimis level


use data from stewards reports for generation &
recovery estimates
adjust allocation of material revenue
Slide 53
Ideas Within Scope of Review
 Alternatives to current funding formula

recycled content

biodegradability

rewards for changes to packaging with
reduced waste stream impact
Slide 54
Ideas Not Within Scope of Review
 Eliminate in-kind contributions
 Flat unit-based fee for all materials
 Unit-based fee for all materials resulting in
neutral market impacts
 Collect fees directly from consumers
 Set fees by brand
 Establish a schedule or cap for increases
in fees
Slide 55
Additional Ideas?
 All ideas will be considered in relation to:



how the modified BBPP would comply with
the WDA
whether the modifications would meet the
objectives of the BBPP
whether the changes, taken together, achieve
an appropriate balance among the review
principles
Slide 56
Dis-aggregation/Differentiation
of Material Fees
Catherine McVitty
Manager, Environmental & Corporate Affairs
Unilever Canada
Slide 57
Dis-aggregation of fees
• Create differential fees for different
plastic and paper grades.
• Fees would reflect costs and ability
of system to manage different
grades.
• Create incentives in the funding
formula to drive design and
purchasing choices to packaging
materials that are more readily
recyclable and easier to handle
through the recycling system.
57
Slide 58
Benefits
• Create cost incentive to design
packaging in recyclable
materials.
• Supports market development of
recyclable packaging material
• Rewards users of recyclable
materials with reduced fees
• Fees would be designed to more
accurately reflect how various
grades of materials are
managed through the recycling
system.
58
Slide 59
Benefits
• Would motivate market
development for those grades
of material that are not readily
recyclable in order to bring
fees down.
• Might bring total system costs
down by moving more
packaging into fewer,
recyclable materials.
59
Slide 60
Drawbacks
• Lacks simplicity in reporting for
stewards
• Requires adjustment to factor
weightings to ensure that an
increased volume in highly
recyclable material doesn’t drive
up cost to manage that material.
• Gives preferential treatment to
some grades of plastics or paper.
60
Slide 61
Questions & Answers
[email protected]
Slide 62
Break
Slide 63
Recycled Content
(Green Procurement Credit)
John Mullinder
Executive Director
Paper & Paperboard Packaging
Environmental Council
Slide 64
Caveats
• Individual musing, not official position of PPEC or
& PA
AF
• Not a collective material suppliers’ view
• Option presented for discussion, requires further
consideration.
64
Slide 65
Suggestion
• Average recycled content (or green procurement) credit
in funding formula
• Would meet conditions of Op. Agreement MOE/WDO (on
3Rs) and BBPP (on Green Procurement)
• Focus on voluntary brandowner/publisher decisionmaking (what they have control over)
• Apply equally to domestic and imported material
• Include a graduated incentive scale (carrot/stick)
65
Slide 66
Key Factors
• Talking about averages (multiple clients, production runs,
economies of scale, rolling averages)
• Brandowner/publisher focus (They determine material
specs. Is explicit credit in levy for reduction but none for
recycled content)
• Steward-driven (Not based on whether municipality
collects material or not, or how much it collects, or what
happens to it after. Stewards do not control this.
Stewards do not control capture rates, open or closed
loop recycling or quality of resulting feedstock). They do
control material specs up front.
66
Slide 67
Key Factors (cont’d)
• Virgin versus Recycled (claim that health reasons require
virgin material therefore not a level playing field)
• But un-level playing field now through cross-subsidization of
packaging materials (alum. credit is shared, aggregation of
paper and plastic packaging cross-subsidizes some
categories, composites are shielded, least cost tonnes
subsidize most cost tonnes). Is virgin versus recycled any
different?
• Brandowners have already decided that the principle of their
right to choose between packaging materials is more
important than the principle of equality between packaging
materials. Group benefits over individual benefits.
67
Slide 68
Verification
• Is a brandowner/publisher claim. They provide back-up
in Steward Report. Onus is on them (just like a tax
return). Open to audit. Can be cross-checked
(anonymously) by particular recycling industry. For
example, paper industry knows exactly where every mill
in world is, equipment it uses, what it produces, its likely
fibre supply.
68
Slide 69
To be resolved
• Size of credit?
• How to measure it?
• If submitted in Steward’s Report, claim would have to be
for the specific material that steward used (claim and
credit tied together). In other words, would not be a
common rate for PET or corrugated.
• Graduated incentive scale (start at 20-25%?). Need
credible entry number (not 5%) and the carrot (green
procurement credit) has to be significant enough to make
the effort worthwhile pursuing.
• “ If you are not buying recycled, you are not
recycling.”
69
Slide 70
Questions & Answers
[email protected]
Slide 71
Incenting 3Rs through the Blue Box
Program Plan Funding Formula
Jo-Anne St. Godard
Executive Director
Recycling Council of Ontario
Slide 72
The principal objectives
of the program
Intent of the WDA &
by extension the BBPP
1.
2.
Promote 3Rs
Develop, implement & operate waste
diversion programs
Stated in the Operating Agreement between the WDO & MOE
1. A Waste Diversion Program should support actions that reduce
the amount of waste generated by a waste generator
2. A waste Diversion Program should support actions that involve
the repeated use of a product or packaging of a product without
a materials change to the form of the product or packaging
between uses
72
Slide 73
Measuring Success
Barriers to Integrating 3Rs incentives
The current funding formula is designed to raise funds
for recycling not to encourage designs that
incorporate environmental sustainability.
First Things First
In order identify whether the current funding formula
has been effective in achieving the stated goals of
the program, a logical first step would be to
undertake an analysis of what packaging changes
have occurred since program implementation
 Has there been a switch to a more recyclable material?
 Is there more recycled content incorporated into packaging?
 Has there been a reduction of materials used in packaging?
73
Slide 74
DIRECTLY rewarding
3Rs activities
How can stewards champion 3Rs?
• Reduce the am’t of materials (reduces
recyclables & residuals)
• Choose packaging that has high recovery
rates & contains recycled content (low
cost to the overall system)
• Promote 3Rs benefits at the point of
generation (to your customers)
74
Slide 75
Mechanisms to stimulate 3Rs activities
Mechanism 1 – Add a composite category to the list of
materials
Background Composite packaging is categorized based on the
highest content material found within the package. Pay-In levies
assessed in this manner do not reflect the true cost of
processing composites. In order for composite materials to be
judged fairly against all other material types, they should be
levied as a category unto themselves reflecting recovery rates
and cost burden to the system.
Implementation
• Categorize (define) composite packaging collected
• Establish a recovery rate & system costs for composite
packaging
• Add composite category * levy fees based on current pay-in
model
• Establish year over year material targets for composites
75
Slide 76
Mechanisms to stimulate 3Rs activities
Mechanism 2 – Provide rewards to stewards who achieve material
specific targets
Background
Effectiveness of the program can only be measured by setting and
achieving targets. The program should increase the recycling of Blue
Box wastes overall and for individual materials. Setting targets helps
to achieve;

High standards for municipalities and stewards

Creates an environment where alternative recovery options may be
considered
Implementation
•
Set annual material-specific targets & post targets for public comment
•
Report results through OCNA/CNA in-kind contribution & post on
stakeholder websites (WDO, MOE, AMO, S.O. and RCO)
•
Re-allocate 5% de minimus provision to discount those stewards who
achieve their targets (incorporate into subsequent year’s costs)
•
For those materials that do not achieve recovery rate targets,
alternative collection and recycling mechanisms must be reviewed by
the related stewards.
76
Slide 77
Mechanisms to stimulate 3Rs activities
Mechanism 3 – Recognize and reward; promote and educate
consumers about reduction/reuse benefits
Background - Reduction and reuse activities could provide significant gains
in the overall diversion goals of the BBPP. Currently there are no
DIRECT financial benefits to stewards who demonstrate a reduction or
reuse of their package.
Implementation
1.
In the net cost portion of the pay-in model, develop a “sub-formula”
(credit system) that reduces the % paid to recognize & reward
reduction or reuse. For example; (Steward ABC has reduced the size
of their package by 20% & has changed to a more recyclable option,
and 50% reduction in the “cost to the system” portion of the pay-in
model.)
2.
Use OCNA/CNA in-kind newspaper “pooled” advertising (provincewide) to promote reduction and reuse initiatives to consumers.
77
Slide 78
Questions & Answers
[email protected]
Slide 79
Raising de minimis Level
In Defense of the Blue Box Program Plan
de minimis Exemption
Judith Andrew
Canadian Federation of Independent Business
Ontario Legislative Affairs Department
Slide 80
CFIB Member Profile and Size of Ontario Businesses
CFIB’s diverse membership of 42,000 small and medium-sized
businesses is a good reflection of Ontario’s economy
Agriculture & Related
Services
Logging & Forestry
5.45%
0.20%
Fishing & Trapping
Other Service Industries
0.10%
7.58%
Accomodation, Food &
Beverage Service
5.86%
Mining (inc.Milling)
Quarrying & Oil Well
0.30%
Health & Social Service
2.73%
<5 employees (75.3%)
Manufacturing
12.73%
Educational Service
0.61%
Construction
11.62%
Business Service
10.20%
500+ employees
(0.2%)
Transportation & Storage
2.63%
Real Estate Operator & Ins.
Agent
2.02%
Communications & Other
Utility
0.51%
Finance & Insurance
1.41%
Retail Trade
28.28%
Source: CFIB data, Ontario (January 2005)
Wholesale Trade
7.78%
50-499 employees
(2.3%)
20-49 employees
(4.5%)
5-19 employees (17.6%)
Total of 969,338 firms with paid employees
Source: Statistics Canada, 1993-1998 Employment Dynamics (2001)
Slide 81
Small Business Demographics Have
Operational Impacts
Who deals with regulation
SIZE OF FIRM
0 to 4 employees
3
7
5 to 19 employees
20 - 49 employees
17
110
10
21
39
52
68
79
50 - 99 employees
100+ employees
9
39
52
2005 CFIB National Survey on Regulation –
Ontario Data, 1,028 Ontario Respondents
14
58
27
Owner
Staff
Unpaid help
Outside professionals
 Small business owners
work alongside their
employees.
 Government requirements
are completed after hours.
Slide 82
Premier McGuinty’s Pre-Election
Commitment
 “We will reduce the bureaucratic workload for small
business. We will convert the Red Tape Commission to
make it an agency specifically devoted to meeting the
needs of small business.”
 The Small Business Agency is just getting underway.
 In the interim, there has been a significant increase in the
bureaucratic workload, making fulfilling the Premier’s
commitment even more challenging.
Slide 83
Waste Diversion Ontario Misses
Minister’s Orders and Intentions
 In approving the BBPP on December 22, 2003, the
Minister asked WDO to: “Undertake analysis of the
financial and operational impacts of the Blue Box
Program Plan on the small business community.”
 The Minister also requested a rule to exempt
stewards 30(1) e of the Act, based on Deminimis
Criteria
Slide 84
Impact of Lowering or Eliminating the de minimis
Exemption
 Trying to capture more smaller firms from those
currently exempted would cause levy increases –
not decreases.
Small businesses would need to be registered in
person due to lingering difficulties with
understanding of the registration and packaging
audit requirements.
The cost of collection to Stewardship Ontario
would far exceed the levy revenue collected.
The levy for all stewards would increase to reflect
growing administration at SO.
Slide 85
CFIB Recommendations on Blue Box
 Raise the deminimis exemption to relieve small
firms and plan administrators, effectively focusing
on large waste contributors
 Clarify compliance requirements and provide
practical tools (website, information/education
materials)
 Revise Funding Formula to: 1) simplify for clarity
and fairness 2) reward firms with lower levies for
packaging reductions achieved 3) end municipal
pass through of half their rising costs.
Slide 86
Lowering de minimis Level
Kim McKinnon
Canadian Council of Grocery Distributors
Vice President, Ontario Region
Slide 87
CCGD MEMBER STEWARDSHIP OBLIGATION
CCGD represents large and small food
distributors - $23.0 billion in revenue
Contributes approximately 12% of
Stewardship Ontario levies
87
Slide 88
DE MINIMUS IN ONTARIO – HOW DID WE GET HERE?
Waste Diversion Act is silent on de minimus
however Minister of Environment provided a
provision.
CCGD and other obligated stewards, agreed to
disagree and a compromise decision was
reached to get the program started.
Current de minimus $2 million in sales, or 15
tonnes of blue box waste.
88
Slide 89
CCGD BLUE BOX PROGRAM PRINCIPLES
All stewards and materials are treated fairly and equitably.
Diversion and the cost is a joint consumer/producer
responsibility.
Environmental Stewardship obligations are a public good not
a tax.
Social responsibility equally shared.
Small doesn’t exempt a company from its social
environmental obligation.
Large or small companies may generate the same amount of
waste
Provide incentive through stewardship fees/municipal bag
limits, expansion of blue box programs for producer and
consumer to move to more recyclable, reusable forms of
packaging
The more exemptions the less motivation to contribute to
environmental goals of the Province.
89
Slide 90
CCGD DE MINIMUS RECOMMENDATIONS
Eliminate De Minimus.
Replace with a choice:
1. Flat fee per steward based on a sliding scale
for sales under $2.0 million.
2. Flat fee per steward based on amount of waste
weight produced.
3. Choose to calculate using current formulas
and waive the flat fee proviso.
90
Slide 91
WHAT DOES CCGD RECOMENDATION ACHIEVE?
100% of stewards registered and working toward
diversion and most environmentally sound packaging
practices. All contribute to social good.
Manageable administrative burden for under $2 million in
sales and under providing flat fee option.
Increased transparency of real levels of waste
generation, diversion and costs as all stewards are
reporting and volumes are being tracked over time.
Ministry of Environment objectives of 60% waste
diversion will not be achieved if exemptions are applied.
91
Slide 92
Questions & Answers
[email protected]
Slide 93
Lunch
Webcast Resumes at ~1:00
Slide 94
Welcome Back
 Reminder to our webcast participants to
email questions anytime to:
[email protected]
Slide 95
Factor Weightings
Guy Perry
Slide 96
Current Funding Formula Weightings
Based only on
Cost to Manage
Newsprint CNA/OCNA
All Other
Printed
Paper
Paper
Based
Packaging
Current Base Fees after
Funding Formula
Plastics
Packaging
Steel
Packaging
Aluminum
Packaging
Glass
Packaging
 3 factor formula transfers portion of costs from materials
with high recovery to materials with low recovery rates
 Designed to reward materials that are contributing to the
achievement of the objectives of the BBPP
 Weightings (40:40:20) designed to balance the
objectives of the BBPP & goals & intent of the WDA
Slide 97
Adjusting Weightings
 Stewardship Ontario staff believe there is
merit to considering adjusting weightings &
factors within the current funding formula
to transfer more of obligation from
materials achieving higher recovery to
materials achieving lower recovery


to promote greater diversion in a cost effective
way
to equitably share the cost of increased
diversion
Slide 98
Increased Diversion at Lower Cost (1)
100% Cost at Current
Recovery of 55% Overall
Newsprint All Other Paper Based
CNA/OCNA Printed Paper Packaging
Plastics
Steel
Aluminum
Glass
Slide 99
Increased Diversion at Lowest Cost (2)
100% Cost at Current
Recovery of 55% Overall
Newsprint All Other Paper Based
CNA/OCNA Printed Paper Packaging
Current Funding Formula
at Current Recovery of
55% Overall
Plastics
Steel
Aluminum
Glass
Slide 100
Increased Diversion at Lowest Cost (3)
100% Cost at 55% Recovery
for Each Material
100% Cost at Current
100% Cost
at Overall
Recovery
of 55%
Current Recovery
of 55% Overall
Newsprint All Other Paper Based
CNA/OCNA Printed Paper Packaging


Current Funding Formula
at Current Recovery of
55% Overall
Plastics
Steel
Aluminum
Glass
All stakeholders benefit from reaching highest overall
diversion rate at lowest possible cost
These costs should be shared equitably
Slide 101
Effect of Adjusting Equalization Factor Target
Current Formula with 75%
Recovery Target
Newsprint CNA/OCNA
All Other
Printed
Paper
Paper
Based
Packaging
Current Formula with 60%
Recovery Target
Plastics
Steel
Aluminum
Glass
 One possible approach:

reduce target recovery on equalization factor from 75% to 60%
 60% factor may have some justification given
Minister’s policy direction
Slide 102
Effect of Adjusting Factors & Weightings
Shift from Recovery to
Equalization Factor
Fees Reflecting
Cost Only
Further Shift from
Recovery to
Equalization Factor
Current
Formula
Newsprint CNA/OCNA
All Other
Printed
Paper
Paper Based
Packaging
Plastics
Steel
Aluminum
Glass
 Many other possible approaches can be
considered e.g. shift in weighting from recovery
rate to equalization
Slide 103
Questions & Answers
[email protected]
Slide 104
Other Suggestions
Within Scope of Review
Derek Stephenson/Guy Perry
Slide 105
Other Suggestions Within Scope of Review
 Adjust allocation of common program costs
 Further aggregation of the printed paper
category
 Allocation of revenue
 Use data from stewards reports for generation &
recovery estimates
 Biodegradability
 Rewards for changes to packaging with reduced
waste stream impact
Slide 106
Allocation of Common Program Costs (1)
 Currently allocated as follows:


first to each major material category (e.g., printed
paper, plastics, etc.) by relative number of stewards
reporting each material
then, to material sub-categories (e.g., within plastics,
PET, HDPE, etc.) according to relative quantity
generated
 Two additional options have been raised:

flat rate per unit of packaging or printed material

rate based on relative volume & weight generated
Slide 107
Allocation of Common Program Costs (2)
 Key questions


to what extent does the modification better
reflect the drivers of WDO & Stewardship
Ontario administration & program delivery
costs?
are the data required to calculate the
allocation readily available?
Slide 108
Further Aggregation of Printed Paper (1)
 A commercial document printed in black on high
grade paper has a fee of 8 ¢/kg compared to a
glossy catalogue with a fee of 0.7 ¢/kg
 Other printed paper category–significant portion
of material managed but for which fees cannot
be collected such as:



many stewards fall under de minimis
paper from home offices, schools, etc. collected in
Blue Box programs
magazines from out-of-province publishers
Slide 109
Further Aggregation of Printed Paper (2)
 Key questions




sharing costs associated with de minimis,
non-reporting, material with no steward &
non-compliance?
is an incentive to switch between paper
grades desirable?
is aggregation justifiable since printed paper
is marketed as mixtures & recovery rates of
specific grades is less accurate?
should the CNA/OCNA newsprint be included
in the aggregation?
Slide 110
Revenue Allocation (1)
 Considering revenue in the fees as
follows:


3-year average of revenue reported by
municipalities
allocate this to individual materials using 3year average prices from CSR Price Sheet
 Concerns raised about current
methodology
Slide 111
Revenue Allocation (2)
Revenue Sharing
 many municipalities have contracts where the revenue is
retained by the service provider
 it is assumed that the municipality receives a discount for
the revenue forgone
 this discount benefits all materials
 the dollar amount of the discount is generally unavailable
& so it is not attributed to individual materials
 the greater the material price, the more the benefit is
shared
Slide 112
Revenue Allocation (3)
 Possible modification:


use annual revenue reported for each
material to better reflect actual revenue
received by programs
try to account for the contribution by each
material to the revenue shared & attribute this
to each material accordingly
Slide 113
Generation Data from Stewards’ Reports
 Current generation estimates based on waste audits in
representative programs across the province

used for calculating recovery rates
 Ensure that all material has a steward identified & pays
the appropriate fees

fee rates calculated using reported steward data
 Key questions if we use steward data for both purposes



how to calculate & collect fees for material generated by
stewards not registered?
how to calculate & collect fees for material for which a steward
cannot be identified?
how would municipal recovery rates be related to generation
estimates?
Slide 114
Biodegradability
 Credit for materials which meet a defined
threshold for degradability
 Key questions:

definition & range of biodegradability

impact on costs

incorporating costs for tracking, verification &
auditing into fees
Slide 115
Rewards for Changes to Packaging
 Costs may be incurred for recycling related
decisions
 Currently reward materials with lower cost of
management & high recovery rate
 Key questions:




definition of “reduced impact on the waste stream:”
emissions, toxicity, energy?
how could the impacts be measured & compared?
should decisions already taken be credited, & if so,
how?
hierarchy for different materials?
Slide 116
Questions & Answers
[email protected]
Slide 117
Options Out of
Scope of Review
Derek Stephenson
Slide 118
Outside Scope of Review (1)
 Eliminate in-kind contributions

Minister recently approved the revision to the BBPP
confirming the CNA/OCNA in-kind contribution
 Flat unit-based fee for all materials

described by MOE lawyers as “definitely in red zone”

not carried forward given the legal & policy issues
 Flat unit-based fee resulting in neutral market
impacts

not carried forward given the legal & policy issues &
practical feasibility
Slide 119
Outside Scope of Review (2)
 Collect fees directly from consumers

not carried forward as no authority
 Set fees by brand

not carried forward because not practical
 Establish a schedule or cap for increases
in fees

not carried forward because not legal
Slide 120
Questions & Answers
[email protected]
Slide 121
Next Steps
Comments & Information
 submit information for evaluating a specific option by
December 22, 2005


send to: [email protected]
include contact information as we may need clarification
 submit general comments by January 12, 2006
Key dates
 steering committee makes recommendations January
20, 2006
 meeting of advisory committee January 25, 2006
 2nd public stakeholder meeting February 15, 2006 (date
to be confirmed)

review preferred option and related changes to BBPP
Slide 122
Thank You