Waste management policy is a hot topic at the moment as various provinces grapple with introducing or modifying what they are calling “Extended Producer Responsibility” or EPR programs on residential printed paper and packaging. The real elephant in the room, however, is the future role of municipalities in Blue Box waste management.
In our view, there are two key elements that need to be addressed in this ongoing, sometimes rancorous debate. The first is: Who’s driving the Blue Box truck? It’s a control issue. We suspect that few would argue against the provinces determining the “rules of the road” since solid waste management is clearly a provincial jurisdiction. This means establishing the framework, setting policy, and monitoring performance.
The “driver” in this somewhat imperfect analogy should be the “producers” since they have the most impact on designing what materials end up in Canadian homes, and are the ones to whom responsibility (financial and/or operational) has been, or is being extended. And we shouldn’t forget that the producers are very much learner drivers who are now having to deal with material design issues at the same time as they dodge the various stewardship potholes and loose gravel in their path.
The rest of us (municipalities, recyclers, processors, material suppliers and consumers) are really “passengers” of one kind or another, sometimes scrambling over each other to get closer to the wheel while suggesting different ways of getting “there.”
What we are witnessing in Canada at the moment is the changing dynamic and tension between these various players as the country transitions to full or partial producer funding of Blue Box programs. “Producers” are quite rightly resisting signing blank cheques for something they have little or no control over. Since they are paying up to 100% of the freight, they want to make sure it’s the most efficient and effective Blue Box system possible. British Columbia, to its credit, has allowed the producers to devise a program that looks to be far more comprehensive, effective and efficient (same materials right across the province), than the current one. BC has determined the framework and has stood back and enabled EPR to happen: allowed the producers to be drivers of the Blue Box truck, as long as they follow the “rules of the road.”
Ontario, on the other hand, in Bill 91, The Waste Reduction Act, has deliberately handed the keys to municipalities. In Ontario, producers currently do not control what materials are collected and have to wait for and lobby more than 200 different municipalities if they want to add something new. The producers neither control how the materials are collected (boxes, carts, bags, two-stream or single-stream, weekly or bi-weekly, or alternating weeks) nor how they are processed. Nor do they control the educational messages required to encourage greater recycling. They do get to pay (under Bill 91) up to 100% of the net program costs though! This is nothing less than a thinly disguised “taxation without representation” scheme that panders to municipal interests. It is a perversion of EPR principles because it enforces a financial responsibility on producers while giving them little or no control over their costs.
This is not to say that some municipalities have not done a good job. Many have. And local governments clearly have a role, and will continue to have a role, in Blue Box management. But it should be a diminished one, if EPR is to be an effective public policy tool. Municipalities should be passengers along with the rest of us, not driving the truck. Some of them may end up collecting or processing Blue Box recyclables, but they should only be allowed to do so, in our view, when they have won a contract bid in a fair competition with private sector service providers.
The underlying question here is whether local governments should be involved in processing and selling commodities into global spot markets with taxpayers’ dollars. Is this really the role of local government, especially when producers are being regulated to pay more and more of Blue Box financial and operational costs? The argument that taxpayers’ money already invested in collection and processing equipment will go to waste if municipalities are denied a lead role, is misguided at best. Material recycling facility (MRF) equipment has a life span of maybe 10 years, collection vehicles perhaps seven, after which they have to be replaced. There clearly has to be a transition period for local government to adjust to its new and lesser role.
Which brings us to the second key element that needs to be considered in this debate: How best to achieve economies of scale? The fact of the matter is that material recycling is primarily an industrial activity not a municipal one. Toronto’s Blue Box program, the largest in the province, supplies only 8% of the total tonnage of paper recycled in Ontario. If we limit ourselves to packaging alone, almost 60% of it (mainly old corrugated boxes) is estimated to be sent for recycling by Ontario industry, not by local governments. To achieve this, the private sector has a long history of building transfer stations and MRFs. There are economies of scale in modifying these already existing industrial MRFs to accept Blue Box materials. Many have already done this.
So a key question that government policy makers and producers regulated under EPR schemes need to consider is whether municipalities should actually be involved in Blue Box material processing at all. Given that most printed paper and packaging is already being processed in private sector MRFs, why do we need brand spanking new municipal ones, funded by taxpayers’ dollars that are then later reimbursed by producers under some EPR scheme? It doesn’t make a lot of sense, environmentally or economically.
We face some interesting times/battles ahead. Stay tuned!