Issue 2, September 2009
Preliminary 2010 Stewards’ Fees Presented—Comments Accepted to September 30
To give stewards the information needed to plan budgets for next year, Stewardship Ontario released the preliminary Blue Box and MHSW fees for 2010 at an information session and webcast on Thursday, September 10. The session started with an overview of the shifting policy and legislative environment that is shaping changes in producer responsibility in Ontario, and then focused on:
Comments by September 30:
Please review the preliminary fees that are pertinent
to your company and submit any comments to us by September
30 at info@stewardshipontario.ca
Shifting Policy and Legislative Environment
Referring to discussions that are taking place at public policy levels on current and future producer responsibility, VP of Policy and Programs, Lyle Clarke, pointed out that stewards should expect the environment to take more a central role in business decision making processes in the coming months. He recommended that stewards should take note of:
- The Minister of the Environment’s recent request for changes to the Blue Box Program Plan, including an increase to the overall recycling recovery target from 60% to 70%, as well as several projects to be led by Waste Diversion Ontario (WDO).
- 100% Extended Producer Responsibility (EPR) for Blue Box that is expected in the future. (Stewards of Municipal Hazardous or Special Materials will be required to move to 100% EPR under the Consolidated MHSW Program Plan, should it be approved by the Minister).
As these changes represent significant challenges for both stewards and Stewardship Ontario, Lyle emphasized that we are building the capacity to tackle them effectively at a lower cost, to measure results, and to benchmark performance against programs around the world in order to ensure Stewardship Ontario’s accountability to the steward community.
Blue Box: Preliminary Fees for 2010 (slides 16 thru 41)
- Industry’s 50% share of net Blue Box costs for the 2010 obligation year is $83.5 million, an increase of 6.3% over the 2009 obligation of $78.5 million. This increase is substantially lower than the increases that have occurred in the previous two years. (See Changes to Steward Obligation 2003-2010)
- Factors contributing to the increase system costs include additions to municipal infrastructure and higher collection and processing costs due, in part, to an increase in both the tonnage collected and harder-to-manage packaging materials, for example, plastic clamshells for such products as fruit and baked goods, and plastic film. The increase in problem plastics in the recycling system requires that Stewardship Ontario invest in technologies and market development initiatives to ensure stable markets for these materials in the future, and to avoid material bans and continued price escalation. (See Change in Industry Obligation 2009/2010)
- Factors offsetting increased costs include reduced adjustments in costs for prior years; higher commodity prices; and reductions negotiated by Stewardship Ontario to reflect ‘best practice’ operations.
- Industry’s total obligation for 2010 is $88.4 million which comprises the payment to municipalities of $83.5 million (91.3%); plus program management ($3.2 million or 3.2%) and other expenses of $1.7 million which include Stewardship Ontario’s share of Waste Diversion Ontario expenses and Ministry of the Environment enforcement. (See Where the Money Goes)
- Stewards’ fees on printed paper and packaging materials are based on a formula that rewards materials that are easier to recycle and that achieve higher recovery rates.
- For context, we compared 2010 Blue Box preliminary fees with an average of 2009 fees from a selection of the largest, most mature stewardship schemes within PRO EUROPE and found that with the exception of “other aluminum,” our fees for individual materials are between 42% and 1274% lower. (See EU Material Fee Rates Compared to SO)
- Some changes have been made to the Blue Box Program Rules including a requirement to report reusable textile carry-out bags and the addition of a new sub-category for aluminum aerosol containers. (See Draft Changes to Blue Box Program Rules)
MHSW Phase 1: Preliminary Fees for 2010 (slides 43 thru 66)
- Phase 1 MHSW preliminary stewards’ fees for 2010 amount to $39.6 million (for 12 months) compared to $36 million in 2008-2009 (18 months). Costs have been budgeted at $35.9 million for 2010. The remaining $3.7 million is attributed to year one deficit recovery. (See Budget: 2010 Compared to 2009)
- 77% of the 2010 budget will be allocated to the cost of managing each of the nine Phase 1 materials; 11% covers program management; 5% is budgeted for promotion and education; 4% for plan development and start-up; and the remaining 3% for transfer payments and information technology. (See MHSW 2010 Budget Components; See Material Specific 2010 Budget Breakdown for material specific management and operating costs)
- The deficit occurred because of five main factors:
- the gap between projected and actual fee revenues (6% to 81% depending on the material which was exacerbated by the economy and the provincial ban on pesticides)
- higher costs to manage five of the nine materials
- higher start-up and infrastructure costs
- stretched capacity to build infrastructure & operate programs
- finding appropriate transporter and processors
- Stewards’
preliminary fees for year 2 of the MHSW Phase 1 Program
are based on the approved plan for 12 months; however,
if the Consolidated MHSW Program Plan is approved
by the Minister of the Environment, the start date
of the new program will be July 1, 2010. A new fee
schedule will go into effect at that time, meaning
the year 2 Phase 1 fees will be in place for six months.
- Changes to the MHSW Phase 1 Program Rules include provisions for calculating fees for pesticides and fertilizer and adding sub-categories for banned and non-banned pesticides and fertilizer to gather data for calculating numeric fee rates. (See
Draft Changes to MHSW Phase 1 Program Rules)
Reminder: Stewards of the 23 material
categories designated under the Consolidated Program
Plan are reminded that the expected start date, pending
Minister's approval of the program, is July 1, 2010.
However, steward reports and fees under the Consolidate
Program for the 2009 program year will be due by March
31, 2010.
News in Brief
- Both the Canadian Appliance Manufacturers Association (CAMA) and the Rechargeable Battery Recycling Corporation of Canada (RBRC) have sent letters to Waste Diversion Ontario (WDO) advising of their intention to submit Industry Stewardship Plans (ISPs) for specific materials currently included in the Consolidated MHSW Program Plan. CAMA is interested in establishing an ISP for mercury switches contained in appliances and RBRC has identified all consumer-type batteries for an ISP. WDO has responded that while Section 34 of the Waste Diversion Act, 2002 allows for it to authorize ISPs, it can do so only after the Minister of the Environment has approved the related program plan. WDO submitted the Consolidated MHSW Plan to the Minister on July 31 after it had been approved by the Stewardship Ontario and WDO Boards of Directors. The plan was available on the Environmental Registry for public comment until August 30 and the Minister and his staff are continuing to review it.
To inquiry about or comment on any of these news items, please email: bmcconnell@stewardshipontario.ca or phone Barbara McConnell at 416-323-0101, ext. 155.
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